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Question
What happens to the ASF curve once it reaches the point of "Full Employment"?
Options
It falls downward toward the origin.
It becomes a horizontal line.
It becomes vertical (inelastic).
It continues to rise at a 45° angle.
MCQ
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Solution
It becomes vertical (inelastic).
Explanation:
Once everyone is employed, no further increase in money receipts can increase employment, making the curve a straight vertical line.
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