The Figure Given Below Depicts Short-Run Equilibrium in an Aggregate

question 97

Multiple Choice

The figure given below depicts short-run equilibrium in an aggregate demand-aggregate supply model. If the economy is at point "e" in the short run, which of these policies adopted by the Fed is likely to return it to long-run equilibrium?

• A) A decrease in government spending
• B) An increase in the tax rate
• C) A decrease in the tax rate
• D) A decrease in the money supply
• E) An increase in the money supply

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Definitions:

Axon Hillock

The cone-shaped region of an axon in a neuron where the axon originates from the cell body.

Calculating Reaction Time

Calculating reaction time involves measuring the duration between the onset of a stimulus and the initiation of a response, important in cognitive and neuropsychological assessments.

Auditory

Related to the sense of hearing or the organs and structures thereof.

Olfactory

Pertaining to the sense of smell.