Use the Following to Answer Questions

question 96

Multiple Choice

Use the following to answer questions .
Exhibit: Shifts in Aggregate Demand and Aggregate Supply and Inflation-Unemployment Phases
-(Exhibit: Shifts in Aggregate Demand and Aggregate Supply and Inflation-Unemployment Phases) The movement from point 4 to point 5 is consistent with which inflation-unemployment phase?

• A) Phillips phase because inflation is increasing while unemployment is falling
• B) recovery phase because although inflation has risen, unemployment has fallen
• C) growth phase because the economy is producing above its potential output
• D) recovery phase because inflation and unemployment have fallen

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Definitions:

Distributor

A person or company that is responsible for supplying goods to retailers or directly to customers.

Manufacturer

A person or company that makes goods for sale, especially on a large scale.

Output Contracts

Agreements in which a seller agrees to sell all the output of a certain product to a particular buyer.

Requirements Contracts

Contracts where one party agrees to purchase all of its needs for a particular commodity from the other party for a certain period.