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Exhibit 16A-3 Macro AD\AS Models as Shown in Panel

Question 6

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Exhibit 16A-3 Macro AD\AS Models Exhibit 16A-3 Macro AD\AS Models As shown in Panel (b) of Exhibit 16A-3, assume the economy adopts a classical nonintervention policy. Which of the following would cause the economy to self-correct? A) Competition among firms for workers increases the nominal wage and SRAS shifts rightward. B) Long-run equilibrium will be established at Y<sub>1</sub> and P<sub>2</sub>. C) Long-run equilibrium will be established at Y<sub>p</sub> and P<sub>3</sub>. D) Competition among unemployed workers decreases nominal wages and SRAS shifts rightward. As shown in Panel (b) of Exhibit 16A-3, assume the economy adopts a classical nonintervention policy. Which of the following would cause the economy to self-correct?


A) Competition among firms for workers increases the nominal wage and SRAS shifts rightward.
B) Long-run equilibrium will be established at Y1 and P2.
C) Long-run equilibrium will be established at Yp and P3.
D) Competition among unemployed workers decreases nominal wages and SRAS shifts rightward.

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