-In the Above Figure, B Is the Current Long-Run Aggregate

question 61

Multiple Choice

-In the above figure, B is the current long-run aggregate supply curve and E is the current short-run aggregate supply curve. If there is an increase in the full-employment quantity of labor, then the long-run aggregate supply curve and the short-run aggregate supply curve

• A) remain B and E.
• B) shift to A and D, respectively.
• C) shift to C and F, respectively.
• D) remain at B and shift at F, respectively.

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Definitions:

Price Ratio

The ratio of the prices of two goods or services, often used in the context of trade or barter.

Elasticity of Demand

A measure of how responsive the quantity demanded is to a change in price, indicating how a product's demand will fluctuate with pricing changes.

Marginal Rate

Often refers to the incremental increase in cost or benefit associated with a one-unit change in an economic activity.

Substitution

The economic principle where consumers replace more expensive items with less costly alternatives, or when firms swap higher-priced inputs with cheaper resources.