-Refer to Figure 15.2. Output is likely to fall and prices are likely to rise if the economy is at point
A) a.
B) b.
C) c.
D) d.

Question

-Refer to Figure 15.2. Output is likely to fall and prices are likely to rise if the economy is at point
A) a. 
B) b. 
C) c. 
D) d.

Quizplus · Accepted Answer

At point c, the economy is operating at full capacity or beyond, which typically leads to inflationary pressures as demand outstrips supply, causing prices to rise. If efforts are made to reduce inflation, such as increasing interest rates or decreasing government spending, output is likely to fall.