Use the Following to Answer Questions

question 140

Multiple Choice

Use the following to answer questions
Figure: Shifts in SRAS and AD
-(Figure: Shifts in SRAS and AD) If the economy is at short-run equilibrium point b because of a negative supply shock,the Fed may focus on price stability and enact a restrictive monetary policy,thus shifting the new equilibrium to point _____.As a result of this,the price level would _____ and real output would _____.

• A) a;decrease to the previous level;further decrease
• B) c;further increase;increase
• C) d;decrease;increase
• D) No monetary policy would have any effect;the equilibrium would remain at point b.

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Definitions:

Piaget's Theory

A developmental theory proposed by Jean Piaget that outlines how children progress through four stages of cognitive development from infancy to adolescence.

Concrete Operational

Concrete operational stage is a phase in Piaget's theory of cognitive development, where children gain the ability to think logically about concrete, physical objects and events.

Cognitive Development

The process of growth and change in intellectual/mental abilities such as thinking, reasoning, and understanding over the course of a human life.

Formal Operations

The stage in Piaget's theory of cognitive development, typically beginning around age 12, characterized by the ability to think abstractly and logically.