Use the figure below to answer the following questions.

Figure 26.3.1
-Refer to Figure 26.3.1. Consider statements (1)and (2)and select the correct answer. (1) The actual unemployment rate exceeds the natural unemployment rate.
(2) Short-run aggregate supply will automatically shift leftward as the economy adjusts to long-run equilibrium.
A)(1)is true; (2)is false.
B)(2)is true; (1)is false.
C)(1)and (2)are false.
D)(1)and (2)are true.
E)(1)is true; (2)is true if the money wage rate falls.

Question

Use the figure below to answer the following questions.
  
Figure 26.3.1
-Refer to Figure 26.3.1. Consider statements (1)and (2)and select the correct answer. (1) The actual unemployment rate exceeds the natural unemployment rate.
(2) Short-run aggregate supply will automatically shift leftward as the economy adjusts to long-run equilibrium.
A)(1)is true; (2)is false. 
B)(2)is true; (1)is false. 
C)(1)and (2)are false. 
D)(1)and (2)are true. 
E)(1)is true; (2)is true if the money wage rate falls.

Quizplus · Accepted Answer

Looking at the figure, we can see that the actual unemployment rate is above the natural unemployment rate, indicating that there is some level of cyclical unemployment in the economy. However, there is no indication that the short-run aggregate supply will automatically shift leftward as the economy adjusts to long-run equilibrium. In fact, it is possible for the economy to move towards long-run equilibrium without any shift in the short-run aggregate supply, depending on how wages and prices adjust. Therefore, statement (2) is false.

Use the Figure Below to Answer the Following Questions