Use the Following to Answer Questions

question 266

Multiple Choice

Use the following to answer questions:
Figure: Policy Alternatives
-(Figure: Policy Alternatives) Refer to Figure: Policy Alternatives. Assume that the economy depicted in panel (a) is in short-run equilibrium at a real GDP level of Y₁. The economy will correct itself:

• A) rapidly, without use of fiscal policy.
• B) in the long run as wages fall.
• C) in the short run as wages rise.
• D) because the aggregate demand curve shifts.

---

Definitions:

Homeowner's Insurance

A type of property insurance that covers damages and losses to an individual's house and assets in the home, providing liability coverage against accidents in the home or on the property.

Burglarized

The act of illegally entering a building with intent to commit theft.

Policy Cover

The extent of protection provided by an insurance policy against specific risks or occurrences.

Theft

In criminal law, knowingly taking or obtaining control over the property of another without consent, using deceit, threats, or coercion.