If an Economy Operates at a Short-Run Equilibrium Output That

question 163

Multiple Choice

If an economy operates at a short-run equilibrium output that exceeds its long-run capacity, which of the following will be most likely to direct the economy toward full employment?

• A) Improvements in technology will shift the LRAS curve to the right.
• B) Resource prices will increase, causing the SRAS curve to shift to the left.
• C) The unemployment rate will increase, causing the economy's aggregate supply curve to shift to the right.
• D) Interest rates will decline, shifting the aggregate demand curve to the right.

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Definitions:

Unconscious Process

Involves mental activities beyond conscious awareness, influencing thoughts, feelings, and behaviors.

Sensory Store

The initial, momentary storage of information, lasting only an instant.

Momentary Storage

A cognitive system responsible for temporarily holding small amounts of information for immediate processing and use.

Cognitive Architecture

Refers to the underlying structure and processes of the human mind, including how we perceive, think, understand, and remember information.