Question 1
Refer to the information provided in Figure 26.8 below to answer the question(s) that follow.
Refer to Figure 26.8. If the economy is currently at Point
D producing output level
Y
2, which of the following is
not true?
◦ The economy is operating below full employment.
◦ Input prices are likely to fall.
◦ Aggregate supply shifts to the right and the economy ends up at Point
E.
◦ The economy is operating above full employment.
Question 2
Refer to the information provided in Figure 26.8 below to answer the question(s) that follow.
Refer to Figure 26.8. If the economy is at point
A currently producing
Y
0 and the
Z factors increase, the economy will move to Point ________ in the short run and to Point ________ in the long run.
◦
B;
C◦
D;
E◦
E;
D◦
C;
B
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Figure 2.15.jpg