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:

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