Exhibit 17-1 -According to Those Who Favor an Active Approach to Policy

question 28

Multiple Choice

Exhibit 17-1
-According to those who favor an active approach to policy, how can the economy shown in Exhibit 17-1 attain equilibrium at potential output?

• A)The SRAS curve will shift to the left.
• B)The SRAS curve will shift to the right.
• C)Either the money supply or government spending should be increased.
• D)Either the money supply or government spending should be decreased.
• E)Aggregate demand should be decreased.

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Definitions:

Utricle

A small sac-like structure in the inner ear that is part of the vestibular system, helping to sense gravity and linear acceleration.

Saccule

A small, fluid-filled cavity or sac within the vestibular system of the inner ear, playing a key role in balance and orientation.

Vestibule

An entrance hall or other open area in a building used by the public, especially a hotel or theater.

Acoustic

Pertaining to sound or the sense of hearing.