If the Economy Is Experiencing an Inflationary Output Gap, the Adjustment

question 48

Multiple Choice

If the economy is experiencing an inflationary output gap, the adjustment process operates as follows:

• A)wages rise, unit costs rise, and the AS curve shifts leftward.
• B)wages fall, unit costs fall, and the AS curve shifts rightward.
• C)wages fall, unit costs rise, and the AS curve shifts leftward.
• D)wages fall, unit costs fall, and the AD curve shifts rightward.
• E)wages do not adjust, but the AD curve shifts to the right.

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Definitions:

Efferent Neurons

Nerve cells that carry neural impulses away from the central nervous system toward muscles or glands to trigger a response or action.

Afferent Neurons

Sensory neurons that relay information from the sense organs toward the brain.

Nerve Impulses

The electrical signals that travel along the nerves, enabling communication between the brain and the rest of the body.

Social Rejection

The experience of being excluded or disregarded by others in a social or personal context, often leading to emotional distress.