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

question 263

Multiple Choice

Figure 15-12
-Refer to Figure 15-12.In the dynamic AD-AS model,if 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 no policy,then at point B

• A)firms are producing above capacity.
• B)there is pressure on wages and prices to fall.
• C)the unemployment rate is greater than the natural rate of unemployment.
• D)incomes and profits are falling.

---

Definitions:

Depression

A mood disorder characterized by persistent feelings of sadness, hopelessness, and a lack of interest or pleasure in daily activities.

Job Loss

The act of losing one’s employment, often leading to economic and psychological stress.

Psychological Disorder

A pattern of behavioral, cognitive, or emotional symptoms that cause distress or significantly impacts daily life, classified within a given diagnostic framework.

Personally Distressing

A term that describes a personal experience or condition that causes emotional pain or discomfort.