Use the Following to Answer Questions

question 27

Multiple Choice

Use the following to answer questions .
Exhibit: Using the Aggregate Demand/Aggregate Supply Model 1
-(Exhibit: Using the Aggregate Demand/Aggregate Supply Model 1) Suppose the economy is initially at point A. All of the following statements are true except

• A) the economy is in equilibrium at its potential output.
• B) the labor market is in equilibrium.
• C) there is no cyclical unemployment.
• D) there is no structural or frictional unemployment.