Figure 9-2

-Refer to Figure 9-2.If the economy is operating at GRDP₁,what would you conclude about this level of production?
A)that the natural rate of unemployment has increased
B)that this point is possible and is permanent
C)that this point is possible, but only temporarily
D)that this point is impossible to achieve

Question

Figure 9-2
 
-Refer to Figure 9-2.If the economy is operating at GRDP₁,what would you conclude about this level of production?
A)that the natural rate of unemployment has increased 
B)that this point is possible and is permanent 
C)that this point is possible, but only temporarily 
D)that this point is impossible to achieve

Quizplus · Accepted Answer

GRDP₁ is below the potential GDP line, indicating that the economy is producing below its full potential. However, this level of production may be possible temporarily due to cyclical factors such as a recession or slowdown in the economy. It is not a permanent or sustainable level of production. The natural rate of unemployment may or may not have increased depending on the specific circumstances. Option D is incorrect as the point is clearly achievable, as it is already being produced.

Figure 9-2 -Refer to Figure 9-2.If the Economy Is Operating at GRDP₁,what