When Output Exceeds the Full Employment Level of Output, We

question 25

Multiple Choice

When output exceeds the full employment level of output, we expect that the

• A) wages and prices increase as the long- run aggregate supply curve shifts upward over time.
• B) wages and prices increase as the short- run aggregate supply curve shifts upward over time.
• C) wages and prices decrease as the short- run aggregate supply curve shifts downward over time.
• D) wages and prices increase as the long- run aggregate supply curve shifts downward over time.

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Definitions:

Capacity

Refers to the maximum amount that something can contain or produce, or the ability to perform a particular task or function.

Levels-Of-Processing

A theory suggesting that the depth of mental processing affects memory; deeper levels of analysis produce more durable memory traces.

Craik And Lockhart

Psychologists who developed the Levels of Processing framework for memory, suggesting that the depth of processing (shallow to deep) affects how well information is remembered.

Frog

A cold-blooded amphibian known for its jumping abilities, croaking sounds, and life cycle that includes both aquatic and terrestrial stages.