The Figure Below Shows Short-Run Equilibrium in an Aggregate Demand-Aggregate

question 56

Multiple Choice

The figure below shows short-run equilibrium in an aggregate demand-aggregate supply model.If the economy is currently producing Y1 level of output,_____.

• A)potential output is less than actual output.
• B)there is zero unemployment.
• C)the price level will rise eventually.
• D)aggregate supply will fall to restore equilibrium.
• E)the actual unemployment rate is more than the natural rate.

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