Exhibit 10.1 -Refer to Exhibit 10.1, Which Shows the Short-Run Aggregate Supply

Multiple Choice

Exhibit 10.1

-Refer to Exhibit 10.1, which shows the short-run aggregate supply (SRAS) curve of an economy. If output is at Y₁, _____

A) the economy produces its potential output and unemployment is at the natural rate.
B) the economy produces its potential output and unemployment is higher than the natural rate.
C) the economy produces its potential output and unemployment is lower than the natural rate.
D) the economy is less than its potential output and unemployment is at the natural rate.
E) the economy is more than its potential output and unemployment is at the natural rate.