The Diagram Below Shows Alternate Paths for Two Hypothetical Economies,each

Multiple Choice

The diagram below shows alternate paths for two hypothetical economies,each starting with GDP of $1 billion.Assume that Area 1 is equal to Area 2. FIGURE 25-1 Refer to Figure 25-1.Which of the following statements about Economies A and B is correct?

A) Economy A will sustain higher material living standards than Economy B in the long run.
B) Economies A and B will have equal material living standards beginning at Year 0.
C) Economy B will sustain higher material living standards than Economy A in the long run.
D) Economies A and B will have equal material living standards beginning at Year X.
E) Economies A and B will have equal material living standards beginning at Year Y.