Figure 26-7 -Refer to Figure 26-7.In the Dynamic AD-AS Model,the Economy Is

question 89

Multiple Choice

Figure 26-7

-Refer to Figure 26-7.In the dynamic AD-AS model,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 policy.This will result in

• A) unemployment rates higher than what would occur if no policy had been pursued.
• B) inflation rates higher than what would occur if no policy had been pursued.
• C) potential real GDP levels lower than what would occur if no policy had been pursued.
• D) real GDP levels higher than what would occur if no policy had been pursued.

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