Agricultural Output Is a Large Part of Econland's GDP

question 11

Multiple Choice

Agricultural output is a large part of Econland's GDP. Particularly bad weather one year leads to an output that is smaller than normal, causing a shock to Econland's economy. Which of these correctly describes, from a Keynesian perspective, the impact of expansionary or contractionary monetary policy taken to address the situation?

• A) Increase M1 to reduce inflation while having no impact on unemployment, or decrease M1 to reduce unemployment while having no impact on inflation.
• B) Increase M1 to reduce both inflation and unemployment, or reduce M1 to increase both inflation and unemployment.
• C) Increase M1 to reduce inflation while adding to unemployment, or decrease M1 to reduce unemployment while adding to inflation.
• D) Increase M1 to reduce unemployment but adding to inflation, or decrease M1 to reduce the inflation while adding to unemployment.

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Definitions:

Storage Decay

The theory that memory traces weaken over time when information is not accessed or used, leading to forgetting.

Organic Chemistry

Organic Chemistry is the branch of science dealing with the structure, properties, composition, reactions, and synthesis of carbon-containing compounds.

Memory Trace

The theoretical concept referring to the physical change in the brain that represents the imprint of an experienced event or piece of information.

Motivated Forgetting

A psychological phenomenon whereby individuals unconsciously block memories of traumatic or disturbing events or information.