Use the figure below to answer the following question(s). Figure 9-2
The economy depicted in Figure 9-2 is experiencing
A) an abnormally high rate of unemployment.
B) an abnormally low rate of unemployment.
C) its natural rate of unemployment.
D) an output that cannot be sustained.

Question

Use the figure below to answer the following question(s). Figure 9-2
 The economy depicted in Figure 9-2 is experiencing
A) an abnormally high rate of unemployment. 
B) an abnormally low rate of unemployment. 
C) its natural rate of unemployment. 
D) an output that cannot be sustained.

Quizplus · Accepted Answer

The curve labeled "LRAS" represents the economy's long-run aggregate supply, which is determined by the economy's productive capacity and the availability of resources over time. The point where the LRAS curve intersects with the aggregate demand curve (AD) represents the economy's natural rate of output and unemployment. Therefore, the economy depicted in Figure 9-2 is experiencing its natural rate of unemployment.

Use the Figure Below to Answer the Following Question(s)