​ ​ Exhibit 16A-2 Macro AD/AS Models

question 10

Multiple Choice

​ ​ Exhibit 16A-2 Macro AD/AS Models
​

In Panel (b) of Exhibit 16A-2, the economy is initially in short-run equilibrium at real GDP level Y₁ and price level P₂. Classical theory argues that:

• A) SRAS will shift to leftward and establish full employment at P ₃ Y _p without government intervention.
• B) higher wages will result in a rightward shift of SRAS.
• C) long-run equilibrium will be established at Y _p and P ₁ .
• D) lower wages will result in a leftward shift of SRAS.

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Definitions:

Training Investment

The allocation of resources by an organization towards the development of its employees' skills and knowledge.

Topping Out

A construction milestone where the last beam is placed atop a structure during its erection.

Reward System

A mechanism for providing incentives or compensation in recognition of achievements, behavior, or performance.

Profit-Sharing Programs

Profit-sharing programs are incentive schemes wherein employees receive a share of the company's profits, usually based on the company's earnings over a specified period.