The Figure Below Shows the Short-Run Aggregate Supply of an Economy

question 133

Multiple Choice

The figure below shows the short-run aggregate supply of an economy. Which of the following is likely to be true if the actual price level in this figure exceeds the expected price level?

• A) Equilibrium output will be Y₂ in the short run.
• B) Equilibrium output will be Y₁ in the short run.
• C) The actual unemployment rate is below the natural rate.
• D) Potential output is greater than actual output.
• E) The actual price level is less than the equilibrium price level.

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Definitions:

Retained Earnings

The portion of a company's profits that is kept or retained and not paid out as dividends to shareholders.

Retained Earnings

The part of the net earnings kept by the company instead of being paid out to its shareholders in the form of dividends.

Financial Statements

Documents that offer a summary of a company's financial status, encompassing the balance sheet, income statement, and cash flow statement.

Treasury Stock

Shares that were issued and subsequently reacquired by a company, held in its own treasury.