If All Prices Adjusted Immediately to Balance the Quantities Supplied

question 13

Multiple Choice

If all prices adjusted immediately to balance the quantities supplied and demanded for all goods and services:

• A)output gaps would not exist.
• B)output gaps would be positive more often than they would be negative.
• C)cyclical unemployment would be positive.
• D)potential GDP would rise much more quickly.

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Definitions:

Unconditioned Response (UR)

An unlearned reaction that is automatically elicited by the unconditioned stimulus.

Unconditioned Stimulus (US)

An unconditioned stimulus is any stimulus that naturally triggers a reflexive response without the need for prior learning.

Operant Conditioning

A learning process through which the strength of a behavior is modified by reinforcement or punishment.

Consequences

The results or effects that follow from specific actions, behaviors, or decisions, possibly affecting future scenarios.