Refer to the Information Provided in Figure 11

question 69

Multiple Choice

Refer to the information provided in Figure 11.8 below to answer the questions that follow. Figure 11.8
-Refer to Figure 11.8. If the economy is currently at Point D producing output level Y₂, which of the following is not true?

• A) The economy is operating below full employment.
• B) Input prices are likely to fall.
• C) Aggregate supply shifts to the right and the economy ends up at Point E.
• D) The economy is operating above full employment.

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Definitions:

Price-elasticity of Demand Coefficient

measures how much the quantity demanded of a good responds to a change in the price of that good, calculated as the percentage change in quantity demanded divided by the percentage change in price.

Absolute Value

A number's distance from zero on a number line, without considering its direction; essentially, it is the non-negative value of a number.

Midpoint Formula

A method used in economics to calculate the elasticity of a variable, such as demand, by averaging the initial and final values.

Price-elasticity-of-demand Coefficient

A measure that calculates the responsiveness of the quantity demanded of a good to a change in its price.