Figure 16-3

question 112

Multiple Choice

Figure 16-3
Panel (a) Panel (b) Suppose the level of potential output (Y_P) is $1,000 billion and the natural rate of unemployment is 5%. In Panel (a) , the aggregate demand curve in Period 1 is AD₁. Assume that the price level in Period 1 has risen by 1.5% from the previous period and the unemployment rate is 10%. Thus, in Panel (b) point F shows an initial rate of inflation of 1.5% and an unemployment rate of 10%. Similarly, point b in Panel (a) corresponds to point G in Panel (b) and point d in Panel (a) corresponds to point H in Panel (b) .
-Refer to Figure 16-3. If the economy were experiencing a recessionary gap, it would be
Operating at

• A) point a only.
• B) point b only.
• C) either point a or point b.
• D) point d only.

---

Definitions:

Interpersonal Conflict

When two or more people disagree.

Pseudolistening

The act of appearing to listen without actually paying attention or comprehending the message being communicated.

Barriers to Effective Communication

Factors that impede the transfer or understanding of information among parties.

Constructive Confrontation

is a method of addressing conflicts in a positive way, aiming to find solutions through open dialogue and mutual respect.