Figure 18-6 -Refer to Figure 18-6.In the Dynamic Model of AD-AS in Model

question 202

Multiple Choice

Figure 18-6

-Refer to Figure 18-6.In the dynamic model of AD-AS in the figure above,if the economy is at point A in year 1 and is expected to go to point B in year 2,and no fiscal or monetary policy is pursued,then at point B

• A) the unemployment rate is very low.
• B) firms are operating at below capacity.
• C) the economy is below full employment.
• D) income and profits are falling.
• E) there is pressure on wages and prices to fall.

---

Definitions:

Social Exchange

Social exchange is a theory in social science that explains how human relationships are formed and maintained based on an exchange process aiming at maximizing benefits and minimizing costs.

Symbolic Interaction

A sociological theory focusing on the importance of language and symbols in human interaction and the development of self.

Parental Inheritance

The passing down of genetic traits, characteristics, or property from parents to their offspring.

Social Conflict

An alternative term for conflict theory; it emphasizes the struggles between groups in society over inequalities, power, and resources.