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Price Level AD Real GDP Figure 9.6 In Figure 9.6, if full employment occurs at Qc...


Price Level AD Real GDP Figure 9.6 In Figure 9.6, if full employment occurs at Qc then aggregate demand is Too small, causing
Price Level AD Real GDP Figure 9.6 In Figure 9.6, if full employment occurs at Qc then aggregate demand is Too small, causing demand-pull inflation. Too small, causing cyclical unemployment Just right Too great, causing cyclical unemployment.
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If full employment occurs at Qc, i.e greater than the equilibrium level of real GDP ,then aggregate demand is too small , causing cyclical unemployment. Hence, option(B) is correct.

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