Figure 7-2 -Refer to Figure 7-2. Based on the Figure, We Can

Multiple Choice

Figure 7-2
-Refer to Figure 7-2. Based on the figure, we can conclude that

A) in the short run, the economy will always achieve full-employment equilibrium.
B) in the long run, given flexible wages and prices, the economy will achieve equilibrium at its potential output level.
C) flexible wages and prices are irrelevant since the LRAS curve is vertical.
D) in the long run, the aggregate demand curve determines the potential output level.