-In the Above Figure, the Short-Run Aggregate Supply Curve Is

question 7

Multiple Choice

-In the above figure, the short-run aggregate supply curve is SAS and the aggregate demand curve is AD. An inflationary gap exists

• A) if the long-run aggregate supply curve is LAS₃.
• B) if the long-run aggregate supply curve is LAS₂.
• C) if the long-run aggregate supply curve is LAS₁.
• D) All of the above answers are correct.

---

Definitions:

Proactive Interference

A phenomenon where older memories interfere with the retrieval of newer memories.

Encoding Failure

The inability to recall specific information because it was not effectively encoded into long-term memory.

Storage Decay

The process of losing information from memory over time due to the lack of use or retrieval of the information.

Interference-induced Forgetting

A phenomenon where previously learned information is lost or harder to recall due to interference from new information.