Exhibit 15-1 -Refer to the Graph in the Exhibit.According to Policymakers Who

question 118

Multiple Choice

Exhibit 15-1

-Refer to the graph in the exhibit.According to policymakers who favour a passive approach to policy, how will the economy attain equilibrium at potential output?  

• A) The SRAS curve will shift to the left.
• B) Real wages will fall, shifting the SRAS curve to the right.
• C) Either the money supply or government spending will be increased.
• D) Either the money supply or government spending will be decreased.

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Definitions:

Correlated

A statistical relationship indicating that two variables move in relation to each other, either positively or negatively.

Relationship

How two or more entities, things, or persons relate to each other, or their state of linkage.

Predict

To declare or indicate an event, condition, or result in the future, typically based on observation, experience, or scientific reasoning.

Representative Sample

A smaller portion of a population that accurately represents the characteristics of the whole population.