Exhibit 20A-2 Macro AD/AS Models

question 2

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 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:

Lewin's Change Model

A theoretical model for understanding organizational or personal change, involving three stages: unfreezing, changing, and refreezing.

Moving

Moving involves changing one's place of residence or location, often involving packing, transportation, and adjustment to a new environment.

New Condition

A status or scenario that differs from the previous state, often implying recent changes or developments.

OD Change Agents

Individuals or entities that act as catalysts for organizational development and change, facilitating improvement and adaptation.