Exhibit 14-6 Aggregate supply curve

-In Exhibit 14-6,where the GDP = $1,200 billion,
A) everyone willing to work at the current wage is employed.
B) the economy has reached full employment.
C) GDP can increase to $1,100 billion without triggering an increase in the price level.
D) no further increases in the price level can generate more real GDP.
E) further increases in the price level must generate lower levels of employment.

Question

Exhibit 14-6 Aggregate supply curve
 
-In Exhibit 14-6,where the GDP = $1,200 billion,
A) everyone willing to work at the current wage is employed. 
B) the economy has reached full employment. 
C) GDP can increase to $1,100 billion without triggering an increase in the price level. 
D) no further increases in the price level can generate more real GDP. 
E) further increases in the price level must generate lower levels of employment.

Quizplus · Accepted Answer

The economy is at full employment when everyone willing to work at the current wage is employed.

Exhibit 14-6 Aggregate Supply Curve