An Economy Is at a Full-Employment Equilibrium, and Then the Aggregate

question 30

Multiple Choice

An economy is at a full-employment equilibrium, and then the aggregate demand curve shifts leftward. As a result, the price level ________ and real GDP ________.

• A) falls; increases
• B) falls; does not change
• C) falls; decreases
• D) rises; decreases
• E) rises; increases

Analyze the effects of interest rates and trade policies on currency values and trade balances.

Describe the historical transition from the gold standard to the current system of currency exchange.

Understand the role of supply and demand in determining freely floating exchange rates.

Recognize the effects of monetary policies on international trade and exchange rates.

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Definitions:

Unconscious

A part of the mind that is inaccessible to the conscious mind but that affects behavior and emotions.

Electra Complex

A psychoanalytic theory describing a girl's sense of competition with her mother for the affection and attention of her father.

Psychosexual Development

Freud's theory of childhood development that focuses on how parents manage their children's sexual and aggressive drives in the first few years is crucial for healthy personality development.

Freud

Sigmund Freud, an Austrian neurologist and the founder of psychoanalysis, a method for treating psychopathology through dialogue between a patient and a psychoanalyst.