​ ​ Exhibit 16A-2 Macro AD/AS Models

question 55

Multiple Choice

​ ​ Exhibit 16A-2 Macro AD/AS Models
​

As shown in Panel (a) of Exhibit 16A-2, assume the economy adopts a classical nonintervention policy. Which of the following would cause the economy to self-correct?

• A) ​Competition among firms for workers increases the nominal wage and SRAS shifts rightward.
• B) ​Long-run equilibrium will be established at Y ₁ and P ₂ .
• C) ​Long-run equilibrium will be established at Y ₁ and P ₃ .
• D) ​Competition among unemployed workers decreases nominal wages and SRAS shifts rightward.

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Definitions:

Temporomandibular Joint

The joint connecting the jawbone to the skull, facilitating movement for chewing and speaking.

Ptosis

A condition characterized by the drooping or falling of the upper eyelid, which may affect one or both eyes.

Macular Degeneration

A chronic eye disease that causes vision loss in the center of your field of vision, typically due to aging.

Hyperthyroidism

A condition where the thyroid gland is overactive, producing excessive amounts of thyroid hormones, leading to a speed-up in the body's metabolism.