Figure 26-11 -Refer to Figure 26-11. in the Dynamic Model of AD-AS

question 43

Multiple Choice

Figure 26-11
-Refer to Figure 26-11. In the dynamic model of AD-AS in the figure above, the economy is at point A in year 1 and is expected to go to point B in year 2, and the Federal Reserve pursues policy. This will result in

• A) unemployment rates higher than what would occur if no policy had been pursued.
• B) inflation higher than what would occur if no policy had been pursued.
• C) real GDP lower than what would occur if no policy had been pursued.
• D) short-term interest rates higher than what would occur if no policy had been pursued.

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Definitions:

Continuous Schedule

A plan or system where operations or activities are carried out without interruption or breaks, often requiring a high level of coordination and resources.

Reinforcement Schedule

A plan or rule that determines how often a desired response will be reinforced in behavior modification.

Desired Behaviour

The specific actions or reactions that an organization or individual aims to elicit from others.

Intermittent Schedule

A type of reinforcement schedule in behavioral psychology where rewards or consequences are applied at irregular intervals to shape behavior.