Figure 15-3 -As Shown in Figure 15-3, If People Behave According to Behave

question 16

Multiple Choice

Figure 15-3
-As shown in Figure 15-3, if people behave according to adaptive expectations theory, an increase in the aggregate demand curve from AD₁ to AD₂ will cause the price level to move

• A)directly from 100 to 110 and then remain at 110.
• B)directly from 100 to 105 and then remain at 105.
• C)from 100 to 105 initially and then eventually move back to 100.
• D)from 100 to 105 initially and then eventually move to 110.

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Definitions:

Ph.D.

A Doctor of Philosophy degree, the highest university degree that is conferred after a course of study.

MA

Could refer to a Master of Arts degree, an academic qualification awarded upon completion of a course of study in the arts, humanities, or social sciences.

BA

An abbreviation commonly used for Bachelor of Arts, a type of undergraduate degree awarded in arts and sciences.

Market-Based Pay

A compensation approach where pay levels are determined by comparing the market rates for similar positions in the relevant labor market.