The Price Adjustments of a Dynamic Model Are Founded on the Intuition

question 46

Multiple Choice

The price adjustments of a dynamic model are founded on the intuition that

• A) upward pressure should be exerted on prices if actual GDP exceeds potential GDP.
• B) downward pressure should be exerted on prices if actual GDP falls short of potential GDP.
• C) downward pressure should be exerted on prices if unemployment in excess of the natural rate puts downward pressure on wages.
• D) upward pressure should be exerted on prices if employment above potential employment portends upward pressure on wages.
• E) all of the above.

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Definitions:

Ear Pinna

The outer part of the ear that captures sound waves and channels them into the ear canal.

Sepsis

A life-threatening condition resulting from the body's response to an infection, leading to tissue damage, organ failure, and potentially death.

Axillary Temperature

Body temperature measured at the underarm or armpit area.

Sims' Position

A body position where the patient lies on their left side with the right knee and thigh drawn up, commonly used for rectal examinations.