-In the above figure, suppose that the economy is at point A when foreign countries begin an expansion and buy more U.S.-made goods. In the short run, this change creates a movement to point___________ and an eventual increase in ___________.
A) B; money wage rates
B) D; the natural unemployment rate
C) D; money wage rates
D) B; the natural unemployment rate

Question

-In the above figure, suppose that the economy is at point A when foreign countries begin an expansion and buy more U.S.-made goods. In the short run, this change creates a movement to point___________ and an eventual increase in ___________.
A) B; money wage rates 
B) D; the natural unemployment rate 
C) D; money wage rates 
D) B; the natural unemployment rate

Quizplus · Accepted Answer

In the short run, an increase in demand for U.S.-made goods due to foreign expansion shifts the aggregate demand curve to the right, moving the economy from point A to point B. This increased demand leads to higher output and employment, eventually causing an increase in money wage rates as the labor market tightens.

-In the Above Figure, Suppose That the Economy Is at Point