Figure 26-6 -Refer to Figure 26-6.In the Dynamic Model of AD-AS in Model

question 10

Multiple Choice

Figure 26-6

-Refer to Figure 26-6.In the dynamic model of AD-AS in the figure above,if the economy is at point A in year 1 and is expected to go to point B in year 2,and the Federal Reserve pursues no policy,then at point B

• A) there is pressure on wages and prices to rise.
• B) the unemployment rate is very, very low.
• C) firms are operating above their normal capacity.
• D) the economy is below full employment.
• E) incomes and profits are rising.

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Definitions:

Hippocampus

The hippocampus is a brain structure involved in the formation of new memories and is also associated with learning and emotions.

Fornix

A C-shaped structure in the brain, part of the limbic system, that acts as a major output tract of the hippocampus.

Amygdala

A part of the brain involved in processing emotions, including fear and pleasure.

Substantia Nigra

(sub-STAN-sha NI-gra) The structure in the midbrain that controls unconscious motor movements.