Figure 15-12 -Refer to Figure 15-12.In the Dynamic AD-AS Model,the Economy Is

question 255

Multiple Choice

Figure 15-12
-Refer to Figure 15-12.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:

Microeconomic Principles

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Canoeing and Kayaking

Recreational or competitive water sports involving navigating waterways in small, narrow vessels.

Overconfident

A cognitive bias where an individual's subjective confidence in their judgements is greater than their objective accuracy.