Exhibit 16A-3 Macro AD\AS Models As shown in Panel (b)of Exhibit 16A-3, assume the economy adopts a classical nonintervention policy. Which of the following would cause the economy to self-correct? A)Competition among firms for workers increases the nominal wage and SRAS shifts rightward. B)Long-run equilibrium will be established at Y₁ and P₂. C)Long-run equilibrium will be established at Y_p and P₃. D)Competition among unemployed workers decreases nominal wages and SRAS shifts rightward.

Question

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The Answer of Exhibit 16A-3 Macro AD\AS Models As shown in Panel (b)of Exhibit 16A-3, assume the economy adopts a classical nonintervention policy. Which of the following would cause the economy to self-correct? A)Competition among firms for workers increases the nominal wage and SRAS shifts rightward. B)Long-run equilibrium will be established at Y₁ and P₂. C)Long-run equilibrium will be established at Y_p and P₃. D)Competition among unemployed workers decreases nominal wages and SRAS shifts rightward.

Exhibit 16A-3 Macro AD\AS Models as Shown in Panel