When the Economy Is Initially Above Full Employment,how Can Monetary

question 66

Multiple Choice

When the economy is initially above full employment,how can monetary policy affect real output?

• A)An expansionary monetary policy can potentially result in an increased price level.
• B)A contractionary monetary policy can potentially result in an increased price level.
• C)An expansionary monetary policy can potentially result in increased real output by shifting the LRAS.
• D)A contractionary monetary policy can potentially result in increased real output, but only in the short run.

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Definitions:

Posterior Spinothalamic Tract

Pathway that carries fine-touch and pressure fibers toward the brain.

Phantom Limb Pain

A painful sensation that an amputee feels, originating from a body part that is no longer present.

Somatosensory System

A part of the sensory system concerned with receiving and processing sensory information from the body, including touch, temperature, pain, and body position.

Cerebellum

A part of the brain at the back of the skull in vertebrates, responsible for coordinating and regulating muscular activity.