According to the Aggregate Expenditures Model, When an Economy Is

question 55

Multiple Choice

According to the aggregate expenditures model, when an economy is in equilibrium at an output level that has high levels of unemployment:

• A) there is no reason to expect that the unemployment will disappear in the short run.
• B) the unemployment will disappear as soon as the economy self-corrects.
• C) the equilibrium is at a point to the right of the natural rate of output.
• D) the price level will soon rise.