The Figure Below Shows the Price Level, Real GDP, and the Potential

question 17

Multiple Choice

The figure below shows the price level, real GDP, and the potential output for an economy. According to those who favor a passive approach to policy, the economy will attain equilibrium at potential output when:

• A) the SRAS curve will shift to the left.
• B) the SRAS curve will shift to the right.
• C) either the money supply or government spending is increased.
• D) the money supply is decreased.
• E) aggregate demand will decrease.

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Definitions:

Delusional Thoughts

False beliefs held with strong conviction despite superior evidence to the contrary.

Institutional Setting

A structured environment, often related to organizations or facilities such as hospitals, schools, or prisons, where specific rules and norms govern behavior.

Cognitive-behavioral Therapy

A psychological treatment method that focuses on changing unhelpful thinking and behavior patterns.

Antipsychotic Drugs

Medications primarily used to manage psychosis, including delusions, hallucinations, or disordered thought, often seen in conditions such as schizophrenia and bipolar disorder.