Use the figure below to answer the following question(s).
Figure 9-2

-Which of the following is true for the economy depicted in Figure 9-2?
A)Potential output equals Y₁.
B)It would be impossible for this economy to achieve an output greater than Y₁.
C)When output Y₁ is achieved,the actual rate of unemployment will exceed the natural rate of unemployment.
D)When output Y₁ is achieved,the actual rate of unemployment will be less than the natural rate of unemployment.

Question

Use the figure below to answer the following question(s).
Figure 9-2
 
-Which of the following is true for the economy depicted in Figure 9-2?
A)Potential output equals Y₁. 
B)It would be impossible for this economy to achieve an output greater than Y₁. 
C)When output Y₁ is achieved,the actual rate of unemployment will exceed the natural rate of unemployment. 
D)When output Y₁ is achieved,the actual rate of unemployment will be less than the natural rate of unemployment.

Quizplus · Accepted Answer

Potential output equals Y₁.

Use the Figure Below to Answer the Following Question(s)