Figure 17-12 -Refer to Figure 17-12.In the Dynamic AD-AS Model,the Economy Is

question 219

Multiple Choice

Figure 17-12

-Refer to Figure 17-12.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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Definitions:

Nutrient

A substance that provides nourishment essential for the growth and maintenance of life.

Nitrites

Compounds containing the nitrite ion, NO2−, often used in food preservation and potentially harmful in high concentrations.

Bicarbonate

A bicarbonate ion (HCO3-) or a salt containing it, which acts as a buffer to maintain the pH balance in blood and other fluids.

Greenhouse Effect

Reradiation of solar heat toward the Earth, caused by an atmosphere that allows the sun’s rays to pass through, but traps the heat in the same manner as the glass of