Given the Expected Price Level, Policies for Reaching Potential GDP

question 113

Multiple Choice

Given the expected price level, policies for reaching potential GDP will work best if the money supply is _____

• A) large, so that prices at potential GDP are below expectations and people can afford to buy enough goods to support the natural level of employment.
• B) large enough that prices at potential GDP exceed expectations and firms can afford to hire workers.
• C) small, so that prices at potential GDP fall below expectations and people can afford to buy enough goods to support the natural level of employment.
• D) small, so that prices at potential GDP exceed expectations and firms can afford to hire workers.
• E) exactly the size that makes prices equal to the prices people expected to prevail.

---

Definitions:

Whistle-blowers

Individuals who expose unethical, illegal, or corrupt practices within an organization to the public or to those in positions of authority.

Offending Organization

An organization that has violated norms, laws, or ethical standards and faces societal, legal, or institutional backlash as a result.

External Locus

A psychological perspective where individuals attribute outcomes and events to external factors or forces beyond their control.

Ethical Matters

Issues or decisions that involve considerations of what is morally right and wrong.