The Figure Given Below Shows the Aggregate Demand Curve and the Short-Run

question 136

Multiple Choice

The figure given below shows the aggregate demand curve and the short-run aggregate supply curve of an economy.The Fed can return the economy depicted by this figure to its potential output in the long run by:

• A)selling US Treasury securities in the open market.
• B)lowering the discount rate.
• C)by lowering the reserve requirement.
• D)buying US Treasury securities in the open market.
• E)printing money.

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Definitions:

Situational Control

The ability of an individual or group to influence the outcome of events or behaviors in a specific context.

Attribution Theory

Theory that explains how you generate explanations for people’s behaviors.

Implicit Personality

A theory suggesting that people make automatic, subconscious judgments about others based on their behavior and appearances.

Standpoint Theory

Theory that a person’s social position, power, or cultural background influences how the person perceives the behavior of others.