Refer to the Diagram Given Below

question 115

Multiple Choice

Refer to the diagram given below.Suppose an economy is initially at point B₁. If workers fully anticipate price level increases and the government uses expansionary policies to bring the unemployment rate below 6 percent, the economy will:

• A)move from B₁ to C₁ at which macroeconomic policies will cease to be effective.
• B)remain at B₁.
• C)follow the path indicated by B₁, B₂, B₃, and B₄.
• D)directly move from B₄ to C₁.

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Definitions:

Buffer

An entity or zone that lies between two or more areas (often countries) and serves to mitigate or prevent direct conflict between them.

Rice Plantations

Large agricultural estates specifically designed for the cultivation of rice, historically significant in the American South where they were worked by enslaved African Americans.

South Carolina

A state located in the southeastern region of the United States, known for its historical significance in the American Civil War and as the site of the first battles.

Black Majority

A demographic situation where the majority of a population or community consists of Black or African American individuals.