FIGURE 29-2 Refer to Figure 29-2

question 82

Multiple Choice

FIGURE 29-2 Refer to Figure 29-2.Suppose an inflationary gap has opened and the economy is at E₁.Which of the following statements best describes the movement of the economy from E₁ to E₂?

• A)The inflationary gap puts upward pressure on factor prices and AS shifts upward.Simultaneously,the Bank of Canada validates the demand shock,thus shifting the AD curve further to the right.
• B)The inflationary gap puts upward pressure on factor prices and AS shifts upward.Simultaneously,the Bank of Canada implements a contractionary monetary policy,shifting the AD curve to the left.
• C)The inflationary gap causes an increase in the expectations of the future inflation.As a result,the AS curve shifts upward and the AD curve shifts to the right.
• D)The inflationary gap generates excess demand for labour,which causes the AD curve to shift to the right.The adjustment process then shifts the AS curve upward.
• E)The economy's adjustment process causes the economy to move from E₁ to E₂.

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Definitions:

USDA's "My Plate"

A nutrition guide created by the United States Department of Agriculture, illustrating the five food groups using a plate model for balanced meals.

Growing Pains

Diffuse muscle aches and pains experienced by children and adolescents, often during nights, without a clear medical cause but thought to be related to growth spurts.

Vitamin Deficiency

A lack of essential vitamins in the diet, leading to various health problems and diseases.

3-Year-Olds

A developmental stage where children experience rapid growth in language, cognitive skills, and social interaction.