Exhibit 16A-3 Macro AD\AS Models as Shown in Panel

question 6

Multiple Choice

Exhibit 16A-3 Macro AD\AS Models As shown in Panel (b) of Exhibit 16A-3, assume the economy adopts a classical nonintervention policy. Which of the following would cause the economy to self-correct?

• A)Competition among firms for workers increases the nominal wage and SRAS shifts rightward.
• B)Long-run equilibrium will be established at Y₁ and P₂.
• C)Long-run equilibrium will be established at Y_p and P₃.
• D)Competition among unemployed workers decreases nominal wages and SRAS shifts rightward.

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Definitions:

Perceptual Masking Task

A technique in cognitive psychology used to investigate the limitations of sensory processing by presenting one visual stimulus immediately after another, influencing the perception of the first.

Dichotic Listening Task

A task in which a person hears two or more different, specially recorded messages over earphones and is asked to attend to one of them.

Stroop Task

A task invented by J. R. Stroop in which a participant sees a list of words (color terms) printed in an ink color that differs from the word named (e.g., green printed in blue ink). The participant is asked to name the ink colors of the words in the list and demonstrates great difficulty in doing so relative to a condition in which non-color words form the stimuli.