Figure 16-6
-Refer to Figure 16-6.In the dynamic model of AD-AS in the figure above,if the economy is at point A in year 1 and is expected to go to point B in year 2,and no fiscal or monetary policy is pursued,then at point B
A)the unemployment rate is very low.
B)firms are operating at below capacity.
C)the economy is below full employment.
D)income and profits are falling.
E)there is pressure on wages and prices to fall.

Question

Figure 16-6 
-Refer to Figure 16-6.In the dynamic model of AD-AS in the figure above,if the economy is at point A in year 1 and is expected to go to point B in year 2,and no fiscal or monetary policy is pursued,then at point B
A)the unemployment rate is very low. 
B)firms are operating at below capacity. 
C)the economy is below full employment. 
D)income and profits are falling. 
E)there is pressure on wages and prices to fall.

Quizplus · Accepted Answer

At point B, the economy is likely experiencing a high level of economic activity, which corresponds to a very low unemployment rate. This is because point B is typically above the full employment level, indicating that most resources, including labor, are fully utilized.

Figure 16-6 -Refer to Figure 16-6.In the Dynamic Model of AD-AS in of AD-AS