The Figure Below Shows the Relationship Between an Economy's Potential

question 102

Multiple Choice

The figure below shows the relationship between an economy's potential output,price level,and real GDP.According to those who favor a passive approach to policy,the economy will attain equilibrium at potential output when:

• A)the short-run aggregate supply curve shifts to the left.
• B)the short-run aggregate supply curve shifts to the right due to a fall in real wages.
• C)either the money supply or government spending is increased.
• D)either the money supply or government spending is decreased.
• E)aggregate demand is decreased.

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Definitions:

Special Product Pattern

Patterns used in algebra to recognize products of binomials that can simplify multiplication and factoring tasks.

Closed Rectangular Box

A three-dimensional shape bounded by six rectangular faces, where all interior angles are right angles, and it is completely enclosed.

Polynomial Function

A mathematical expression consisting of variables and coefficients that involves only the operations of addition, subtraction, multiplication, and non-negative integer exponents of variables.

Volume

The three-dimensional space occupied by an object, measured in cubic units.