Use the Figure Below to Answer the Following Questions

question 127

Multiple Choice

Use the figure below to answer the following questions. Figure 3.2.2
-Refer to Figure 3.2.2.If consumers' income increases,

• A)the quantity of pizzas demanded increases.
• B)the demand curve for pizzas shifts from D₁ to D₂ if a pizza is a normal good.
• C)the supply of pizzas increases.
• D)the quantity of pizzas supplied decreases.
• E)a movement from point A to point B on D₁ occurs.

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Definitions:

Short-run Phillips Curve

A curve representing the inverse relationship between the rate of inflation and the rate of unemployment in an economy over the short term.

Money Supply Growth Rate

The rate at which the amount of money available in an economy is increasing.

Natural Rate of Unemployment

The level of unemployment consistent with sustainable economic growth, where the labor force and job vacancies are in equilibrium.

Monetary Policy

A strategy used by a country's central bank to control the money supply in the economy, often targeting inflation or interest rates to ensure economic stability.