Figure 34-7
-Refer to Figure 34-7. Which of the following is correct?
A) Unemployment rises as the economy moves from point a to point b.
B) Either fiscal or monetary policy could be used to move the economy from point b to point a.
C) If the economy is left alone, then as the economy moves from point b to long-run equilibrium, the price level will fall farther.
D) All of the above are correct.

Question

Figure 34-7 
-Refer to Figure 34-7. Which of the following is correct?
A) Unemployment rises as the economy moves from point a to point b. 
B) Either fiscal or monetary policy could be used to move the economy from point b to point a. 
C) If the economy is left alone, then as the economy moves from point b to long-run equilibrium, the price level will fall farther. 
D) All of the above are correct.

Quizplus · Accepted Answer

All the statements are correct: unemployment rises from point a to b, fiscal or monetary policy can move the economy from b to a, and if left alone, the price level will fall as the economy moves from b to long-run equilibrium.

Figure 34-7 -Refer to Figure 34-7. Which of the Following Is Correct