Use the Following to Answer Questions

question 27

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 point A. All of the following statements are true except

• A) the economy is in equilibrium at its potential output.
• B) the labor market is in equilibrium.
• C) there is no cyclical unemployment.
• D) there is no structural or frictional unemployment.

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Definitions:

Second Job

Employment taken in addition to one's primary job, often to earn extra income.

Full Time

Employment status in which an individual works the maximum number of legal hours defined by the employer, often with benefits.

Business Profits

The excess of revenues over expenses for a business operation, indicating the financial success of the company.

Income

The money received, usually on a regular basis, for work or through investments, which affects consumer spending and saving decisions.