Use the Following to Answer Questions

question 69

Multiple Choice

Use the following to answer questions
Exhibit: Economic Adjustments
-(Exhibit: Economic Adjustments)
Suppose the economy is at point a.Assume that (1)
The public's expectations are completely rational; (2)
Markets allocate resources instantaneously; and (3)
The economy is at its natural level of employment.The theoretical adjustment path resulting from an increase in aggregate demand according to the rational expectations hypothesis is

• A)a to c to d.
• B)a to b to d.
• C)a to d.
• D)a to b and back to a.

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Definitions:

Occipital Bone

The bone that forms the back and base of the skull, and through which the spinal cord passes.

Sphenoid Bone

A complex bone at the base of the skull, which helps form the eye socket, the floors of the cranium, and the sides of the skull.

Temporal Bone

A pair of bones situated at the sides and base of the skull, contributing to the skull's structure and housing the organs of hearing and equilibrium.

Sphenoid Bone

A complex, butterfly-shaped bone at the base of the skull, which forms part of the eye socket, the nasal cavity, and the floor of the cranium.