​ ​ Exhibit 16A-2 Macro AD/AS Models

question 31

Multiple Choice

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

​ As shown in Panel (b) 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 _p and P ₃ .
• D) ​Competition among unemployed workers decreases nominal wages and SRAS shifts rightward.

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Definitions:

United Automobile And Aerospace Workers

A labor union that represents workers in the automobile, aerospace, and agricultural implement manufacturing industries in the United States.

Monopsony

Monopsony is a market condition where there is only one buyer for a product or service, giving the buyer substantial control over the market and the terms of purchase.

J.P Stevens

An American textile manufacturer once prominent but now absorbed through various mergers; also known for landmark labor disputes.

ToyotA

A multinational automaker headquartered in Japan, known for its innovative production methods and a wide range of vehicles.