Figure 27-2 -Refer to Figure 27-2.In the Dynamic Model of AD-AS in Model

question 78

Multiple Choice

Figure 27-2

-Refer to Figure 27-2.In the dynamic model of AD-AS in the figure above,if the economy is at point A in year 1 and is expected to go to point B in year 2,and no fiscal or monetary policy is pursued,then at point B

• A) the unemployment rate is very low.
• B) firms are operating below capacity.
• C) the economy is above full employment.
• D) income and profits are rising.
• E) there is pressure on wages and prices to rise.

Learn about the major paths to economic development for countries at different stages of development.

Grasp the main obstacles to achieving higher rates of economic growth and development in developing countries.

Know the importance of improving human resources in the quest for economic growth in developing countries.

Understand the factors contributing to economic growth and high per capita incomes in developed nations.

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Definitions:

Gallons

A unit of volume measurement used primarily in the United States, defined as 231 cubic inches or approximately 3.785 liters.

Ambrosia

In classical mythology, the food of the gods, which conferred immortality; in general usage, something very pleasing to taste or smell.

Plowshares

Metal blades fitted to a plow, used in farming to cut through the soil.

Comparative Advantage

The ability of an entity to produce goods or services at a lower opportunity cost than other entities, leading to more efficient economic exchanges.