Use the Following to Answer Questions

question 76

Multiple Choice

Use the following to answer questions:
Figure: Inflationary and Recessionary Gaps
-(Figure: Inflationary and Recessionary Gaps) Refer to Figure: Inflationary and Recessionary Gaps. If the economy is in short-run equilibrium at Y₁ in panel (b) , to return to potential output at Y_P policy makers should use:

• A) contractionary stabilization policy.
• B) expansionary stabilization policy.
• C) policies to shift the SRAS to the left.
• D) policies to shift the LRAS to the left.

---

Definitions:

Death Rates

A statistical figure showing the number of deaths per year, often per 1,000 individuals, in a particular population.

World Commodity Prices

The prices of raw materials and agricultural products that are traded on a global scale.

BTU

British Thermal Unit, a measure of heat energy used in the power, steam generation, heating, and air conditioning industries.

British Thermal Unit

A measure of heat energy defined as the amount needed to raise the temperature of one pound of water by one degree Fahrenheit.