Figure 8-4 -The Reason That It Is Possible for the Economy in the Economy

question 105

Multiple Choice

Figure 8-4
-The reason that it is possible for the economy in Figure 8-4 to be at E₂ rather than at E₁ is that

• A)in the long run there is always less than full employment.
• B)in the short run the economy can produce more than it can in a long-run full-adjustment situation.
• C)AD always shifts outward and never shifts inward.
• D)the economy must be in a recession.

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