Figure 15-11 -Refer to Figure 15-11.In the Dynamic Model of AD-AS in of AD-AS

question 12

Multiple Choice

Figure 15-11
-Refer to Figure 15-11.In the dynamic model of AD-AS in the figure above,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 higher than what would occur if no policy had been pursued.
• C)real GDP lower than what would occur if no policy had been pursued.
• D)short-term interest rates higher than what would occur if no policy had been pursued.