Exhibit 20A-2 Macro AD/AS Models

question 16

Multiple Choice

Exhibit 20A-2 Macro AD/AS Models

-As shown in Panel (b) of Exhibit 20A-2,assume the economy adopts a classical nonintervention policy.Which of the following would cause the economy to self-correct?

• A) Competition among firms for workers increases the nominal wage and SRAS shifts rightward.
• B) Long-run equilibrium will be established at Y₁ and P₂.
• C) Long-run equilibrium will be established at Yp and P₃.
• D) Competition among unemployed workers decreases nominal wages and SRAS shifts rightward.

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