The Figure Below Shows the Short-Run Aggregate Supply Curve of an Economy.In

question 66

Multiple Choice

The figure below shows the short-run aggregate supply curve of an economy.In this figure,if P₁ is the price level prevailing in the economy,it implies that:​ ​
Figure 10.1

• A)there is an expansionary gap.
• B)the price level will decrease.
• C)the actual unemployment rate is equal to the natural unemployment rate.
• D)the actual unemployment rate is below the natural unemployment rate.
• E)the actual rate of output is more than the potential output.

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Definitions:

Arsenal of Democracy

A phrase used by President Franklin D. Roosevelt during World War II, describing the United States' role in supplying Allied nations with military materials.

Adam Smith

Scottish economist known as the father of modern economics, best known for his theory on free markets and the invisible hand guiding economies.

Specialization and Exchange

Economic strategy where individuals, regions, or nations focus on producing goods in which they have a comparative advantage, and then trade with others for what they need.

Trade Barriers

Measures implemented by governments to control or limit the volume of goods and services imported or exported, affecting international trade.