FIGURE 24-5 Refer to Figure 24-5

question 100

Multiple Choice

FIGURE 24-5 Refer to Figure 24-5.Following a positive demand shock that takes the economy from E₀ to E₁,the movement of the economy from E₁ to E₂ indicates that

• A)a demand shock can keep real GDP above potential output permanently.
• B)an increase in the price level causes the AS curve to shift to the left.
• C)an increase in the price level causes the AD curve to shift to the left.
• D)the economy cannot return to potential output without government intervention.
• E)the output effect of a demand shock will be reversed in the long run when wages and prices are fully adjusted.

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Definitions:

Perceived Ability

An individual's belief or self-assessment of their capability to perform tasks or achieve goals.

Primary Appraisal

One’s initial appraisal of a potentially stressful event (Lazarus and Folkman).

Perceived Stress Scale (PSS)

A psychological instrument used to measure the perception of stress; it assesses the degree to which situations in one’s life are appraised as stressful.

Coping Responses

The strategies and behaviors that individuals use to manage the internal and external demands of situations that are appraised as stressful.