If the AS and the AD Curves Intersect at a Level

question 40

Multiple Choice

If the AS and the AD curves intersect at a level of real GDP that exceeds potential GDP,then the appropriate monetary policy is one that ________ the target cash rate and ________ aggregate demand.

• A)lowers;increases
• B)lowers;decreases
• C)raises;has no effect on
• D)raises;decreases
• E)raises;increases

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Definitions:

Private Ownership

Refers to assets or properties owned by individuals or companies and not by the government or public entities.

Government Services

The range of services provided by government agencies to citizens including sanitation, public education, healthcare, policing, and transportation.

Uncertainty Avoidance

A cultural dimension that describes how societies deal with the unknown, with high avoidance indicating a preference for clear rules and low avoidance reflecting more comfort with ambiguity.

Cultural Relativism

The perspective that beliefs, morals, and ethics are relative to each individual within his or her own social context.