The Figure Below Shows the Equilibrium in an Aggregate Demand-Aggregate

question 3

Multiple Choice

The figure below shows the equilibrium in an aggregate demand-aggregate supply model.In this figure,which of the following is true for an economy that is at point V in the short run?

• A)There is a recessionary gap worth $200 billion.
• B)The potential output is $7 trillion.
• C)The actual price level is 100.
• D)The natural rate of unemployment is more than 6.8 trillion.
• E)The actual output is equal to the potential output.

---

Definitions:

Accounting Profits

The total revenues of a business minus the explicit costs, essentially the net income on the financial statements.

Total Revenue

The total income received by a firm from its sales of goods or services, calculated as the quantity sold multiplied by the selling price.

Barriers to Entry

Factors that prevent or hinder new competitors from easily entering an industry or area of business.

Short Run

A time period in economics during which some factors of production are fixed, influencing decisions on production and costs.