-Refer to Exhibit 16

question 32

Multiple Choice

-Refer to Exhibit 16.7, which reflects the relationship between the inflation rate and the unemployment rate. If the economy is initially at point c and aggregate demand increases, in the long run, the economy will ____

• A) move toward point a.
• B) move toward point b.
• C) stay at point c.
• D) move toward point d.
• E) move toward point f.

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Definitions:

Marginal Benefit

The additional satisfaction or utility that a person receives from consuming one more unit of a good or service.

Marginal Social Cost

The additional cost to society of producing one extra unit of a good or service.

Garbage Disposal

A device installed under a kitchen sink that shreds food waste into small pieces to pass through plumbing.

Recycling

The process of converting waste materials into new products to prevent waste of potentially useful materials, reduce consumption of fresh raw materials, and lower energy usage and pollution.