Use the Figure Below to Answer the Following Question(s)

question 146

Multiple Choice

Use the figure below to answer the following question(s) .
Figure 14-2
-If the Fed anticipates that the conditions illustrated by AD₁ and SRAS in Figure 14-2 will be present in the near future, it should

• A)shift to a more restrictive policy.
• B)shift to a more expansionary policy.
• C)request that Congress raise tax rates.
• D)refuse to buy any more U.S.securities.

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Definitions:

Personal Capital

Financial assets or investments owned by an individual, contributing to their net worth.

Compensating Differentials

Wage differences across jobs that reflect the desirability of the job attributes, compensating workers for job inconveniences or hazards.

Distributional Justice

The ethical principle concerned with the fair allocation of goods, wealth, or resources among individuals in a society.

John Rawls

An American philosopher known for his theory of justice and contributions to political and moral philosophy.