Figure 27-4 -In the New Classical Model in Figure 27-4,the Initial Impact

question 4

Multiple Choice

Figure 27-4
-In the new classical model in Figure 27-4,the initial impact of an anticipated increase in aggregate demand that is less than expected ________.

• A) increases output from Yn to Y2, and the inflation rate from P1 to P2
• B) decreases output from Yn to Y5, and increases the inflation rate from P1 to P5
• C) decreases output from Yn to Y4, and increases the inflation rate from P1 to P4
• D) does not change output and increases the inflation rate from P1 to P3

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Definitions:

Behavior Modification

A therapeutic approach that seeks to change undesirable behaviors through the systematic application of the principles of learning.

Cognitive Therapy

Therapy that teaches people new, more adaptive ways of thinking and acting; based on the assumption that thoughts intervene between events and our emotional reactions.

Behavior Modification

A form of psychotherapy that uses basic learning techniques to change maladaptive behaviors to more desirable ones.

Anxiety-arousing

Stimuli or situations that evoke feelings of fear, apprehension, or nervousness in individuals.