Figure 8-4 -The Reason That It Is Possible for the Economy in the Economy

Multiple Choice

Figure 8-4
-The reason that it is possible for the economy in Figure 8-4 to be at E₂ rather than at E₁ is that

A) in the long run there is always less than full employment.
B) in the short run the economy can produce more than it can in a long-run full-adjustment situation.
C) AD always shifts outward and never shifts inward.
D) the economy must be in a recession.