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 economy of Econoworld is experiencing a below full-employment equilibrium.
(2) The actual unemployment rate equals the natural unemployment rate.
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 natural unemployment rate is too high.

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 economy of Econoworld is experiencing a below full-employment equilibrium.
(2) The actual unemployment rate equals the natural unemployment rate.
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 natural unemployment rate is too high.

Quizplus · Accepted Answer

The economy of Econoworld is experiencing a below full-employment equilibrium as the actual output (Y) is lower than the potential output (Y*) at the given price level (P1). However, we cannot conclude that the actual unemployment rate equals the natural unemployment rate as this information is not given in the figure. Hence, statement (1) is true and statement (2) is false.

Use the Figure Below to Answer the Following Questions