-Refer to the Above Figure

question 2

Multiple Choice

-Refer to the above figure. Suppose the economy's initial equilibrium is represented by the intersection of LRAS₁ and AD₁. Now there is an increase in labor productivity which increases total planned production at any given price level and aggregate demand remains stable. The resulting change in the economy's long-run equilibrium position would be represented by a

• A) movement from B to D.
• B) movement from C to D.
• C) movement from C to B.
• D) movement from A to B.

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Definitions:

Contract

An agreement between multiple parties that is recognized and can be enforced by the legal system.

Promissory Estoppel

A legal principle that prevents a party from withdrawing a promise made to a second party if the latter has reasonably relied on that promise to their detriment.

Promisee

The party in a contract who is to receive the benefit or performance specified in the agreement.

Promise

A declaration or assurance that one will do something or that a particular thing will happen.