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Figure 17-1 -Refer to Figure 17-1.Suppose That the Economy Is Currently at Is

Question 7

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Figure 17-1 Figure 17-1   -Refer to Figure 17-1.Suppose that the economy is currently at point A on the short-run Phillips curve in the figure above,and the unemployment rate at A is the natural rate.If the economy was to move to point B,which of the following must be true? A) The economy is producing a level of GDP equal to potential GDP. B) Aggregate demand must have increased. C) Equilibrium GDP at point B must be below potential GDP. D) The Fed conducted expansionary policy to cause the move. E) The Fed purchased treasury bills to cause the move.
-Refer to Figure 17-1.Suppose that the economy is currently at point A on the short-run Phillips curve in the figure above,and the unemployment rate at A is the natural rate.If the economy was to move to point B,which of the following must be true?


A) The economy is producing a level of GDP equal to potential GDP.
B) Aggregate demand must have increased.
C) Equilibrium GDP at point B must be below potential GDP.
D) The Fed conducted expansionary policy to cause the move.
E) The Fed purchased treasury bills to cause the move.

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