Use the figure below to answer the following questions.

Figure 26.3.2
-Refer to Figure 26.3.2. If the economy of Mythlo automatically adjusts to long-run equilibrium, then
A)the price level rises to 90.
B)real GDP is $600 billion.
C)the actual unemployment rate exceeds the natural unemployment rate.
D)potential GDP decreases.
E)the SAS curve shifts rightward.

Question

Use the figure below to answer the following questions.
  
Figure 26.3.2
-Refer to Figure 26.3.2. If the economy of Mythlo automatically adjusts to long-run equilibrium, then
A)the price level rises to 90. 
B)real GDP is $600 billion. 
C)the actual unemployment rate exceeds the natural unemployment rate. 
D)potential GDP decreases. 
E)the SAS curve shifts rightward.

Quizplus · Accepted Answer

The correct answer is A because the price level rises to 90 when the economy automatically adjusts to long-run equilibrium.

Use the Figure Below to Answer the Following Questions