The figure given below depicts the long run equilibrium in an economy.
Figure 14.1
In the figure:
AD 1 and AD 2 : Aggregate demand curves
AS 1 and AS 2 : Aggregate supply curves
-Refer to Figure 14.1. When the economy moves from point B to point C:
A) both the unemployment rate and the rate of inflation increases.
B) both the unemployment rate and the rate of inflation declines.
C) the unemployment rate declines at the cost of higher inflation.
D) the rate of inflation declines at the cost of a higher unemployment rate.
E) the rate of inflation declines with no change in the unemployment rate.

Question

The figure given below depicts the long run equilibrium in an economy.
Figure 14.1
  In the figure:
AD 1 and AD 2 : Aggregate demand curves
AS 1 and AS 2 : Aggregate supply curves
-Refer to Figure 14.1. When the economy moves from point B to point C:
A) both the unemployment rate and the rate of inflation increases. 
B) both the unemployment rate and the rate of inflation declines. 
C) the unemployment rate declines at the cost of higher inflation. 
D) the rate of inflation declines at the cost of a higher unemployment rate. 
E) the rate of inflation declines with no change in the unemployment rate.

Quizplus · Accepted Answer

The Answer of The figure given below depicts the long run equilibrium in an economy.
Figure 14.1
  In the figure:
AD 1 and AD 2 : Aggregate demand curves
AS 1 and AS 2 : Aggregate supply curves
-Refer to Figure 14.1. When the economy moves from point B to point C:
A) both the unemployment rate and the rate of inflation increases. 
B) both the unemployment rate and the rate of inflation declines. 
C) the unemployment rate declines at the cost of higher inflation. 
D) the rate of inflation declines at the cost of a higher unemployment rate. 
E) the rate of inflation declines with no change in the unemployment rate.

The Figure Given Below Depicts the Long Run Equilibrium in an Economy