Use the Following to Answer Questions

question 11

Multiple Choice

Use the following to answer questions .
Exhibit: Responses to a Decrease in Aggregate Demand
-(Exhibit: Responses to a Decrease in Aggregate Demand) The economy is initially in equilibrium at point (1) . Now suppose a reduction in the money supply causes aggregate demand to fall to AD₂. The below potential output level of Y₂ will exist as long as

• A) policymakers refrain from using discretionary policies.
• B) workers fail to recognize that their real wages have increased and that they need to accept lower nominal wages.
• C) economic agents do not respond to falling prices by increasing aggregate demand back to AD₁.
• D) producers do not increase the price of their output.

---

Definitions:

Web 2.0

The second generation of the Internet, characterized by greater user interactivity, collaboration, and sharing among users.

Interactive Social System

A framework wherein individuals engage and communicate within a community through reciprocal action and influence.

Web 3.0

An advanced stage of the internet characterized by semantic web technologies, artificial intelligence, and blockchain, promising a more user-centric online experience.

Vehicles

Modes of transportation that move people or goods from one place to another, including cars, buses, bicycles, etc.