Use the Following to Answer Questions

question 71

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 A. Now suppose an increase in government purchases shifts the aggregate demand curve to AD₂. Which of the following is false about the economy after it adjusts to its new long-run equilibrium?

• A) Nominal wages increase.
• B) The price level rises to P_d.
• C) Firms employ more workers than in the short-run equilibrium.
• D) There is some frictional and structural unemployment.

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Definitions:

Light-Colored Butterflies

Butterflies with lighter pigmentation, which may have advantages in certain environments, such as reflecting solar radiation.

Allopatric Speciation

The process of speciation that occurs when biological populations of the same species become isolated from each other to an extent that prevents or interferes with genetic interchange.

Genetic Diversity

The total number of genetic characteristics in the genetic makeup of a species, contributing to differences within the species.

Genetic Equilibrium

Theoretical state in which an allele’s frequency never changes in a population’s gene pool.