Figure 1110 Alt Text for Figure 11

question 144

Multiple Choice

Figure 11.10 Alt text for Figure 11.10: In figure 11.10, a graph comparing real GDP and price level.
Long description for Figure 11.10: The x-axis is labelled, real GDP (trillions of 2007 dollars) and the y-axis is labelled, price level (CPI, 2002 = 100) .3 lines are shown; AD, LRAS, SRAS.Line AD begins in the top left corner and slopes down to the end of the x-axis.Line SRAS begins in the bottom left corner and slopes up to the top right corner.Line LRAS is perpendicular to the x-axis, and intersects the lines AD and SRAS.The point of intersection of lines AD and SRAS is marked as A.
-Refer to Figure 11.10.In the figure above, if the economy is at point A, the appropriate monetary policy by the Bank of Canada would be to

• A)lower the target for the overnight interest rate.
• B)raise the target for the overnight interest rate.
• C)lower income taxes.
• D)raise income taxes.
• E)lower the desired reserve ratio.

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Definitions:

Social Learning Theory

A theory that proposes individuals learn behaviors, skills, and attitudes through observation of others rather than through direct experience alone.

Reinforcement Theory

A behaviorist theory suggesting that behavior is shaped by its consequences, with reinforcement used to increase desired behaviors.

Need Satisfaction

the fulfillment of basic or complex desires or requirements essential for mental and physical well-being.

Verbal Persuasion

The technique of using spoken words to influence or convince others to adopt a particular viewpoint or take a specific action.