Course: ECO 110

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Unit 7 Assignment »

Unit 7 Assignment

Unit 7 Assignment

Consider the following graph:

Describe why point B is the most desirable point on the graph.  What is happening to unemployment at point B?

Point C describes what type of gap? What is the problem with unemployment at this point?  Which point on the graph is likely to describe the economy in 2008 – 2009?

If unemployment  persists and there is a very slow adjustment  in the aggregate demand or in the short run aggregate supply, what government policy could be used to stimulate the economy?

Are there disadvantages to this government policy?

If there were a short run increase in technology and its application to production, what would happen to the short run supply curve?