Exhibit 16-2 -In Exhibit 16-2,the Aggregate Demand in the Economy Is Represented

question 146

Multiple Choice

Exhibit 16-2
-In Exhibit 16-2,the aggregate demand in the economy is represented by AD₀ and the short run aggregate supply by SRAS₁₂₀.If an active policy approach is followed to eliminate the recessionary gap,the economy will move from its current short-run equilibrium to _______.

• A)A
• B)B
• C)F
• D)D

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Definitions:

Non Binding Price Floor

A non binding price floor is set below the market equilibrium price, having no effect on the market because it does not restrict supply or demand.

Explicit And Implicit Coercion

Refers to the overt and subtle ways in which individuals or groups may be forced or pressured into behaving in certain ways.

Desirable Consequences

Positive outcomes or benefits that result from a particular action or set of actions.

Proposed Changes

Suggestions or plans put forward for consideration or action to modify or alter existing methods, processes, or structures.