The Figure Below Shows the Relationship Between an Economy's Potential

question 50

Multiple Choice

The figure below shows the relationship between an economy's potential output,price level,and real GDP.According to those who favor a passive approach to policy,the economy will attain equilibrium at potential output when: ​
Figure 16.1​
​

• A)the short-run aggregate supply curve shifts to the left.
• B)the short-run aggregate supply curve shifts to the right due to a fall in real wages.
• C)either the money supply or government spending is increased.
• D)either the money supply or government spending is decreased.
• E)aggregate demand is decreased.

---

Definitions:

Observable Symptoms

Signs of a condition or disease that can be seen or measured, often forming the basis for diagnosis.

Baseline

An initial set of measurements or observations used for comparison with subsequent data.

Symptomatic Behavior

Actions or manifestations that are indicative of an underlying psychological condition or issue.

Object Relations Theorists

Psychologists who study how people form representations of others and relationships based on early caregiving experiences.