-In the above figure,if the economy is at point A,which of the following is true?
A) Point A is the long-run equilibrium point.
B) The economy is in a recession.
C) Money wages can be expected to fall.
D) The economy might be at point A as a result of a recent cut in the tax rate.

Question

-In the above figure,if the economy is at point A,which of the following is true?
A) Point A is the long-run equilibrium point. 
B) The economy is in a recession. 
C) Money wages can be expected to fall. 
D) The economy might be at point A as a result of a recent cut in the tax rate.

Quizplus · Accepted Answer

The economy is at point A because of a recent cut in the tax rate. This has led to an increase in aggregate demand, which has shifted the AD curve to the right. As a result, the economy is now operating at a higher level of output and employment.

-In the Above Figure,if the Economy Is at Point A,which