Use the figure below to answer the following question(s). Figure 11-3
Refer to Figure 11-3. When the economy is operating at point a, which of the following will be most likely to happen?
A) an increase in resource prices
B) a decrease in resource prices
C) the current output will be sustained in the future
D) an increase in aggregate demand

Question

Use the figure below to answer the following question(s). Figure 11-3
 Refer to Figure 11-3. When the economy is operating at point a, which of the following will be most likely to happen?
A) an increase in resource prices 
B) a decrease in resource prices 
C) the current output will be sustained in the future 
D) an increase in aggregate demand

Quizplus · Accepted Answer

At point a, the economy is producing at full employment and at its potential output. As a result, any increase in aggregate demand will lead to a shortage of resources, causing an increase in resource prices.

Use the Figure Below to Answer the Following Question(s)