The Figure Below Shows the Short-Run Aggregate Supply Curve of an Economy.If

question 5

Multiple Choice

The figure below shows the short-run aggregate supply curve of an economy.If the actual price level exceeds the expected price level,then:

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• A)equilibrium output is likely to be Y2 in the short run.
• B)equilibrium output is likely to be Y1 in the short run.
• C)equilibrium output is likely to be Y3 in the short run.
• D)potential output is greater than actual output.
• E)unemployment is above the natural rate.

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Definitions:

Impossibility

A legal defense where a party claims it was not possible to fulfill the terms of a contract due to unforeseen circumstances.

Commercial Impracticability

A legal doctrine that excuses a party from fulfilling a contract due to unforeseen and extreme difficulties or expenses.

Adequacy of Consideration

The sufficiency of value exchanged in a contract that must be present for the agreement to be legally binding.

Warranty

An express or implied promise by a seller that specific goods to be sold meet certain criteria, or standards of performance, on which the buyer may rely.