Figure 14-2
-In Figure 14-2,suppose the economy is at an equilibrium at point D and you are considering policy options to eliminate unemployment.What is the opportunity cost of any aggregate demand based policy option?

Question

Figure 14-2 
-In Figure 14-2,suppose the economy is at an equilibrium at point D and you are considering policy options to eliminate unemployment.What is the opportunity cost of any aggregate demand based policy option?

Quizplus · Accepted Answer

The opportunity cost of using aggregate demand-based policy options to eliminate unemployment typically involves higher prices. This is because increasing aggregate demand can lead to inflationary pressures, raising the general price level in the economy.

Figure 14-2 -In Figure 14-2,suppose the Economy Is at an Equilibrium at an Equilibrium