Exhibit 10A-6 Aggregate Demand and Supply Model

question 137

Multiple Choice

Exhibit 10A-6 Aggregate demand and supply model
​

​ Beginning from a point of short-run equilibrium at point E₂ in Exhibit 10A-6, the economy's movement to a new position of long-run equilibrium from that point would best be described as:

• A) ​a movement along the AD ₂ curve caused by a shift in the SRAS ₁ curve to SRAS ₂ .
• B) a movement along the SRAS ₂ curve with a shift in the AD ₂ curve.
• C) ​a shift in the LRAS curve to an intersection at E ₃ .
• D) ​ no shift of any kind.

---

Definitions:

State-Dependent Memory

The phenomenon where information learned in a particular state or context is better recalled when in that same state or context.

Priming

A psychological effect whereby exposure to one stimulus influences the response to a subsequent stimulus, without conscious guidance or intention.

False Memories

An inaccurate or distorted recollection of an event that feels very real to the person remembering it.

Imagination Inflation

A phenomenon where vividly imagining an event can increase confidence that the event actually occurred in the past.