Exhibit 17-2 Aggregate Demand and Aggregate Supply Curves as Shown

question 36

Multiple Choice

Exhibit 17-2 Aggregate demand and aggregate supply curves As shown in Exhibit 17-2, if people behave according to adaptive expectations theory, an increase in the aggregate demand curve from AD₁ to AD₂ will cause the economy to move:

• A)directly from E₁ to E₃ and then remain at E₃.
• B)directly from E₁ to E₂ and then remain at E₂.
• C)from E₁ to E₂ initially and then eventually move back to E₁.
• D)from E₁ to E₂ initially and then eventually move to E₃.

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Definitions:

Preconventional

The first level of Kohlberg's stages of moral development, where behavior is motivated by anticipation of pleasure or pain.

Kohlberg

Refers to Lawrence Kohlberg, a psychologist known for his theory of moral development, which posits that moral reasoning progresses through six stages.

Lie

A false statement made with deliberate intent to deceive.

Spanking

A form of punishment involving hitting the buttocks, typically used by some parents to discipline children.