In the Very Long-Run AD-AS Model

question 27

Multiple Choice

In the very long-run AD-AS model,

• A)only fiscal policy can affect both output and prices
• B)only monetary policy can affect both output and prices
• C)monetary policy can affect output but not prices
• D)active stabilization policy is ineffective in changing output
• E)the unemployment rate is always assumed to be zero

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Definitions:

Cognitive Processes

Mental activities involved in the acquisition, storage, manipulation, and retrieval of knowledge.

Social Cognitive Theory

A theory that suggests learning occurs in a social context with a dynamic and reciprocal interaction of the person, environment, and behavior.

Awareness

The state or ability to perceive, feel, or be conscious of events, objects, or sensory patterns.

Self-Regulation

The ability of an individual or organization to monitor and control their behaviors, actions, or thoughts to achieve certain goals.