Figure 12.3 -Refer to Figure 12.3.Suppose That After a Negative Supply Shock,the

question 82

Multiple Choice

Figure 12.3

-Refer to Figure 12.3.Suppose that after a negative supply shock,the economy is at point X in the IS-MP model and at point B on the Phillips curve.If the Bank of Canada has a goal of high employment and therefore does not adjust interest rates,the economy would ________ in the IS-MP model and ________ on the Phillips curve.

• A) remain at point X; move to point C
• B) remain at point X; remain at point B
• C) move to point Z; move to point A
• D) move to point Z; move to point C

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Definitions:

Adrenal Glands

Small glands located above the kidneys that produce hormones like adrenaline and cortisol, which help regulate metabolism, immune system, and stress responses.

Lateral Hypothalamus

An area of the brain known as the "hunger center," which controls feeding behavior, thirst, and other functions related to the body's energy needs.

Salty Tastes

One of the basic taste sensations; it is produced primarily by the presence of sodium ions.

Social Psychologist

A scientist who studies how people’s thoughts, feelings, and behaviors are influenced by the actual, imagined, or implied presence of others.