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

question 194

Multiple Choice

Figure 26-11
-Refer to Figure 26-11. In the dynamic model of AD-AS in the figure above, if 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 no policy, then at point B

• A) there is pressure on wages and prices to rise.
• B) the unemployment rate is very, very low.
• C) firms are operating above their normal capacity.
• D) the economy is below full employment.

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Definitions:

Free Society

A society where individuals have significant freedom in their life choices, speech, and actions, often characterized by democratic governance and rule of law.

Ethical Question

An inquiry that involves examining moral principles and values to make a judgment about the rightness or wrongness of an action.

Ethical Imperatives

Intended to shape or guide behavior by expressing core values and beliefs about what is morally right or morally wrong. Ethical imperatives express behavioral ideals and moral principles by pointing out what we ought to do or ought to refrain from doing.

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