Figure 17-1 -Refer to Figure 17-1.Suppose That the Economy Is Currently at Is

question 102

Multiple Choice

Figure 17-1
-Refer to Figure 17-1.Suppose that the economy is currently at point A on the short-run Phillips curve in the figure above,and the unemployment rate at A is the natural rate.If the economy was to move to point B,which of the following must be true?

• A)The economy is producing a level of GDP equal to potential GDP.
• B)Aggregate demand must have increased.
• C)Equilibrium GDP at point B must be below potential GDP.
• D)The Fed conducted expansionary policy to cause the move.
• E)The Fed purchased treasury bills to cause the move.

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Definitions:

Memory Loss

The inability to remember information and experiences that would normally be able to be recalled, which can be temporary or permanent and due to various reasons including diseases, brain injury, or psychological trauma.

La Belle Indifference

An apparent lack of concern or distress about one’s significant physical or psychological problems, often seen in conversion disorder.

Physical Symptoms

Physical expressions or manifestations of a medical condition, illness, or injury.

Symptom Substitution

Symptom substitution is the theory suggesting that if the underlying cause of a symptom is not addressed, new symptoms will emerge to replace the original ones.