The Figure Given Below Depicts the Long Run Equilibrium in an Economy

question 43

Multiple Choice

The figure given below depicts the long run equilibrium in an economy.
Figure 14.1
In the figure:
AD₁ and AD₂: Aggregate demand curves
AS₁ and AS₂: Aggregate supply curves
-Refer to Figure 14.1. The movement from point A to point B to point C results in:

• A) a constant price level and a decline in the natural rate of unemployment.
• B) a rightward shift of the short-run Phillips curve.
• C) a lower price level and no change in the natural rate of unemployment.
• D) a movement up the short-run Phillips curve.
• E) a lower price level and a decline in the natural rate of unemployment.

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Definitions:

Independent Employee Representation

A way for workers to have a voice in their workplace without being affiliated with a traditional union.

Managerial Authority

The legal or organizational power granted to managers to make decisions, allocate resources, and direct the activities of others within an organization.

Labor Problem

Issues arising from employment relationships, including disputes over wages, working conditions, union rights, and employer practices.

Bargaining Power

The capacity of one party to influence the terms of negotiation or outcomes to its advantage.