Suppose the Economy Is Operating at Full Employment

question 115

Multiple Choice

Suppose the economy is operating at full employment.A permanent rightward shift in the AD curve will cause inflationary pressures that will

• A)cause Y to fall below Y*.
• B)worsen any existing unemployment problem.
• C)initiate a wage-price spiral.
• D)eventually subside unless accompanied by expansionary monetary policy.
• E)permanently increase output.

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Definitions:

Productivity

The measure of efficiency at which goods or services are produced, often evaluated in terms of output per unit of input.

Leadership Polarity

The idea that leaders are often either revered or vastly unpopular.

Group Members

Individuals who are part of a group or team, sharing common goals and collectively contributing to tasks or discussions.

Opposite Traits

Characteristics or qualities that are distinctly different or contrary to each other within an individual’s personality or behavior.