In the Long-Run ISLM Model and with Everything Else Held

question 95

Multiple Choice

In the long-run ISLM model and with everything else held constant,as long as the level of output ________ the natural rate level,the price level will continue to ________,shifting the LM curve to the ________,until finally output is back at the natural rate level.

• A)exceeds;rise;right
• B)exceeds;fall;left
• C)remains below;fall;right
• D)remains below;rise;left

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Definitions:

Functional Fixedness

A mindset that limits an individual's use of an object to its conventional purpose alone, inhibiting their capacity for innovation and solving challenges.

Functional Fixedness

A cognitive bias that limits a person's ability to use an object only in the way it is traditionally used, hindering problem-solving.

Functional Fixedness

A cognitive bias that limits a person to using an object only in the way it is traditionally used, hindering the ability to see alternative uses or solutions.

Insight

The capacity to gain an accurate and deep understanding of a person or situation.