Use the figure below to answer the following questions.

Figure 26.3.2
-Refer to Figure 26.3.2. Consider statements (1)and (2)and select the correct answer. (1) The economy of Mythlo is experiencing an above full-employment equilibrium.
(2) SAS will automatically shift rightward 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 only if the LAS curve shifts rightward at the same time.

Question

Use the figure below to answer the following questions.
  
Figure 26.3.2
-Refer to Figure 26.3.2. Consider statements (1)and (2)and select the correct answer. (1) The economy of Mythlo is experiencing an above full-employment equilibrium.
(2) SAS will automatically shift rightward 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 only if the LAS curve shifts rightward at the same time.

Quizplus · Accepted Answer

The economy of Mythlo is experiencing an above full-employment equilibrium, which makes statement (1) true. However, statement (2) is false because the SAS (Short-Run Aggregate Supply) curve does not automatically shift rightward; it typically shifts leftward as the economy adjusts to long-run equilibrium due to rising costs and wages.

Use the Figure Below to Answer the Following Questions