Use the Figure Below to Answer the Following Questions

question 132

Multiple Choice

Use the figure below to answer the following questions.

Figure 26.3.2
-Refer to Figure 26.3.2. If the economy of Mythlo automatically adjusts to long-run equilibrium, then

• A)the price level rises to 90.
• B)real GDP is $600 billion.
• C)the actual unemployment rate exceeds the natural unemployment rate.
• D)potential GDP decreases.
• E)the SAS curve shifts rightward.

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Definitions:

Utility Function

A mathematical representation of how different combinations of goods or services can result in varying levels of satisfaction or utility to a consumer.

Consumer's Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay, representing the benefit consumers receive from the purchase.

Earplugs

Small devices inserted into the ear canal to protect the ears from loud noises, water, or foreign bodies.

Consumer's Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service versus the total amount they actually pay.