Figure 15-3 as Shown in Figure 15-3, If People

question 9

Multiple Choice

Figure 15-3 As shown in Figure 15-3, if people behave according to adaptive expectations theory, an increase in the aggregate demand curve from AD₁ to AD₂ will cause the economy to move

• A) directly from E₁ to E₃ and then remain at E₃.
• B) directly from E₁ to E₂ and then remain at E₂.
• C) from E₁ to E₂ initially and then eventually move back to E₁.
• D) from E₁ to E₂ initially and then eventually move to E₃.

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Definitions:

Declines

The process of diminishing in quality, quantity, or strength over time.

Assertiveness

A characteristic of being self-assured and confident without being aggressive.

Fluctuate

To change or vary irregularly in number, amount, or degree; often used to describe variables that do not remain constant.

Adult Personality

The range of enduring personal characteristics and traits that define an adult individual's enduring patterns of thinking, feeling, and behaving.