If the economy is at point A which of the following statements is correct?

Question

Answer

Cyclical unemployment is negative and over time the AS curve shifts upwards.

Answer

Cyclical unemployment is positive and over time the AS curve shifts upwards.

Answer

There is a negative output gap and over time the inflation rate will increase.

Answer

Cyclical unemployment is positive and over time the AS curve shifts downwards.

Answer

There is a positive output gap and over time the inflation rate will decline.

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