Exhibit 20A-2  Macro AD/AS Models in Panel (B) of Exhibit

question 215

Multiple Choice

Exhibit 20A-2  Macro AD/AS Models In Panel (b) of Exhibit 20A-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 P₃Y_p without government intervention.
• B) higher wages will result in a leftward shift of SRAS.
• C) long-run equilibrium will be established at Y_p and P₃.
• D) all of the above will take place.

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Mastery Motivation

An intrinsic drive to achieve proficiency or control over a task or skill through persistent effort.

Helpless Orientation

An orientation in which one seems trapped by the experience of difficulty and attributes one’s difficulty to a lack of ability.