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Figure 98 Alt Text for Figure 9

question 36

Multiple Choice

Figure 9.8 Alt text for Figure 9.8: In figure 9.8, a graph comparing real GDP and price level.
Long description for Figure 9.8: The x-axis is labelled, real GDP (trillions of dollars) , with values 1.60, 1.64, 1.65 marked.The y-axis is labelled, price level (CPI) , with values 125 and 127 marked.6 lines are shown; SRAS1, SRAS2, AD1, AD2, LRAS1, LRAS2.Line SRAS1 begins in the bottom left corner and slopes up to the top right corner.Line SRAS2 follows the same slope as line SRAS1, but is plotted to the right.The area between lines SRAS1 and SRAS2 is indicated by a right pointing arrow.Line AD1 begins at the top left corner and slopes down to the bottom center.Line AD2 follows the same slope as line AD1, but is plotted to the right.The area between lines AD1 and AD2 is indicated by a right pointing arrow.Line LRAS1 is perpendicular to the x-axis, and begins from the value 1.60.Line LRAS2 is perpendicular to the x-axis, and begins from the value 1.65.The area between lines LRAS1 and LRAS2 is indicated by a right pointing arrow.Line LRAS1 intersects lines AD1 and SRAS1 at point A (1.60, 125) .Lines AD2 and SRAS2 intersect at point B (1.64, 127) .Points A and B are connected to their respective coordinates on the x-axis and y-axis with dotted lines.Line LRAS2 intersects lines SRAS1 and SRAS2 near the right end of these lines.Similarly, line LRAS2 intersects lines AD1 and AD2 near the right end of these lines.
-Refer to Figure 9.8.Given the economy is at point A in year 1, the unemployment rate will ________ and the price level will ________ in year 2.

Definitions:

Illegal Contract

A contract that is void and unenforceable from its inception because it involves activities that are against the law or public policy.

Unlicensed Attorney

An individual practicing law without the necessary legal authorization or license, which is illegal and subject to penalties.

Public Policy

Principles and standards considered to be in the public's interest by governing bodies and law.

Promissory Estoppel

A legal principle that prevents a party from reneging on a promise when the other party has reasonably relied on that promise to their detriment.