FIGURE 24-2 -Refer to Figure 24-2.Suppose the Economy Is in a Short-Run

question 142

Multiple Choice

FIGURE 24-2
-Refer to Figure 24-2.Suppose the economy is in a short-run equilibrium at Y₁.A contractionary fiscal policy would restore the economy to potential output (Y^*) by shifting the

• A)AS curve to the left to intersect AD at C.
• B)AS curve to the right.
• C)potential GDP and the AS curve to the left.
• D)AD curve to the right.
• E)AD to the left to intersect AS at point A.

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Definitions:

Functionalism

A theory in psychology that considers mental life and behavior in terms of active adaptation to the person's environment.

Freudian Psychology

A comprehensive theory of human nature that emphasizes the importance of the unconscious mind, developed by Sigmund Freud.

Positive Psychology

A field of psychology focused on the study of positive aspects of human life, such as happiness, well-being, and thriving.

William James

An American philosopher and psychologist, often referred to as the father of American psychology.