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

Multiple Choice

Use the figure below to answer the following question(s) .
Figure 10-16
-Suppose an economy is currently operating at output Y₁ associated with AD₁ and SRAS₁, shown in Figure 10-16. Initially, the output of this economy is

A) above its potential, and the rate of unemployment is greater than the natural rate.
B) below its potential, and the rate of unemployment is greater than the natural rate.
C) above its potential, and the rate of unemployment is less than the natural rate.
D) below its potential, and the rate of unemployment is less than the natural rate.