When the Output of an Economy Exceeds the Economy's Full-Employment

question 74

Multiple Choice

When the output of an economy exceeds the economy's full-employment capacity,

• A) aggregate supply will increase until the economy can produce the output at the existing price level.
• B) the actual rate of unemployment will be less than the natural rate.
• C) wage rates and resource prices will tend to fall.
• D) interest rates will decline and help direct the economy back to full employment.

---

Definitions:

Narmer

An ancient Egyptian pharaoh, historically credited with the unification of Upper and Lower Egypt around the 31st century BC and often associated with the iconic Narmer Palette.

Unification

The process of making or becoming united or whole, often used in historical contexts to describe the merging of separate states or entities into a single nation.

Falcon

A bird of prey belonging to the genus Falco, revered in many cultures for its hunting prowess and often symbolic of nobility.

Horus

An ancient Egyptian deity represented as a falcon, associated with the sky, war, and hunting, and seen as a protector of the Pharaoh.