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Figure 28-1 -Refer to Figure 28-1. Suppose That the Economy Is Currently

question 74

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Figure 28-1 Figure 28-1   -Refer to Figure 28-1. Suppose that the economy is currently at point A on the short-run Phillips curve in the figure above, and the unemployment rate at A is the natural rate. If the economy was to move to point C, which of the following must be true? A)  The economy is producing a level of GDP equal to potential GDP. B)  Aggregate demand must have decreased. C)  Equilibrium GDP at point C must be above potential GDP. D)  The Fed conducted contractionary policy to cause the move. E)  The Fed sold treasury bills to cause the move.
-Refer to Figure 28-1. Suppose that the economy is currently at point A on the short-run Phillips curve in the figure above, and the unemployment rate at A is the natural rate. If the economy was to move to point C, which of the following must be true?

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