Figure 27-5 -Refer to Figure 27-5. in the Dynamic Model of AD-AS

question 106

Multiple Choice

Figure 27-5
-Refer to Figure 27-5. In the dynamic model of AD-AS in the figure above, if the economy is at point A in year 1 and is expected to go to point B in year 2, and no fiscal or monetary policy is pursued, then at point B

• A) the unemployment rate is very low.
• B) firms are operating below capacity.
• C) the economy is above full employment.
• D) income and profits are definitely rising.
• E) there is pressure on wages and prices to rise.

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Definitions:

FOB Shipping Point

The shipping process in which the buyer pays transportation charges for goods, the title for which passes to the customer when the goods are loaded onto the shipping vehicle.

Buyer

A person or organization that acquires goods or services, often in exchange for money.

Shipping Costs

Expenses associated with the transportation of goods from one location to another, typically borne by the seller or the buyer as specified in sales terms.

GIS

Geographic Information System, a tool that captures, stores, analyzes, and presents spatial or geographical data.