If an Economy Operates at a Short-Run Equilibrium Output That

question 163

Multiple Choice

If an economy operates at a short-run equilibrium output that exceeds its long-run capacity, which of the following will be most likely to direct the economy toward full employment?

• A) Improvements in technology will shift the LRAS curve to the right.
• B) Resource prices will increase, causing the SRAS curve to shift to the left.
• C) The unemployment rate will increase, causing the economy's aggregate supply curve to shift to the right.
• D) Interest rates will decline, shifting the aggregate demand curve to the right.

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Definitions:

Personality Type

Distinct patterns of thought, feeling, and behavior that characterize an individual’s adjustments to the world; often categorized into specific types or categories.

Detached

Emotional or physical disengagement or separation from others, often as a defense mechanism or coping strategy.

Need for Privacy

The individual desire or requirement for personal space and confidentiality.

Neurotic Trends

Three categories of behaviors and attitudes toward oneself and others that express a person’s needs; Horney’s revision of the concept of neurotic needs.