Assume Output Is at Its Full-Employment Level and the Fed

question 8

Multiple Choice

Assume output is at its full-employment level and the Fed restricts money supply.What is the most likely outcome?

• A)an immediate decrease in prices, with no impact on output
• B)no change in nominal wages in the short run, but a decline in output and prices in the medium run
• C)no change in real wages, but a decline in output and prices in the medium run
• D)a decrease in nominal wages and prices in proportion to money supply, but no change in output and real interest rates in the long run
• E)both B and D

Understand the ACT model of memory and differentiate between the types of memory it describes.

Identify the role of schemata and scripts in organizing knowledge.

Explain the classical, prototype, and exemplar views of concepts and their implications for categorization.

Understand the concept of priming and its implications for memory and cognition.

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Definitions:

Market Structures

The organization and characteristics of a market, influencing how firms compete, including elements like competition level and product differentiation.

Emerging Market

A country's market that has some characteristics of a developed market but does not fully meet its standards, showing potential for economic growth.

Window of Opportunity

A limited period during which an advantageous action can be taken or a goal can be achieved before the conditions change.

Barriers to Entry

Obstacles that make it difficult for new entrants to enter a market, including high start-up costs, legal restrictions, and existing competition.