When Both Long-Run and Short-Run Aggregate Supply Shift Leftward

question 2

Multiple Choice

When both long-run and short-run aggregate supply shift leftward,

• A) monetary policy is more likely to restore the economy to its prerecession conditions.
• B) inflation is not a concern.
• C) the natural rate of unemployment decreases.
• D) monetary policy can have no effect on the economy,even in the short run.
• E) monetary policy is much less likely to restore the economy to its prerecession conditions.

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Definitions:

Instrumental Conditioning

A method of modifying the intensity of a behavior through the use of either rewards or penalties.

Reinforcement Schedule

A strategy in behavioral psychology that determines how and when a response will be rewarded to encourage certain behavior.

Socializing Agent

Individuals, groups, or institutions that play a significant role in integrating people into society by teaching social norms, values, and beliefs.

Effectiveness

The degree to which something is successful in producing a desired result; efficiency.