The SRAS Is Horizontal at a Price Level of 3

question 28

Multiple Choice

The SRAS is horizontal at a price level of 3.
-According to the AD-AS model,the economy depicted above will achieve a long-run equilibrium with a price level equal to ___________ and output equal to ___________.

• A) 1;650
• B) 2;650
• C) 3;650
• D) 4;650
• E) 5;600

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Definitions:

Equity

Fairness or justice in the way people are treated, or the ownership interest of shareholders in a company.

Efficiency

The optimal production and distribution of resources in a way that maximizes the net benefit to society or an economy.

Total Surplus

A measure of society's overall net advantage resulting from the consumption and production of a good or service, comprised of both consumer and producer surplus.

Fire Marshal

An official responsible for enforcing fire safety codes and regulations, as well as investigating fires to determine their cause.