Figure 12-1 -Refer to Figure 12-1. Assume That the Economy Is Initially

question 132

Multiple Choice

Figure 12-1
-Refer to Figure 12-1. Assume that the economy is initially at Y₁. A nonintervention policy
Would result in the restoration of potential output by allowing the

• A) the aggregate demand curve to shift to the right.
• B) the short-run aggregate supply curve to shift to the right.
• C) the aggregate demand curve to shift to the left.
• D) the short-run aggregate supply curve to shift to the left.

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Definitions:

Representative Heuristic

A mental shortcut that involves making judgments based on how similar something is to our typical idea of a particular category.

Primary Dimension

Fundamental categories or aspects that define the nature or characteristics of an entity, concept, or system.

Perceptions

The process of organizing, identifying, and interpreting sensory information in order to represent and understand the environment or an idea.

Intent

The purpose or intention behind an action, often determining its meaning or implications.