-Refer to the Above Figure

question 254

Multiple Choice

-Refer to the above figure. The rational expectations hypothesis implies that an anticipated increase in aggregate demand from AD1 to AD2 will

• A) move the economy from c to b.
• B) move the economy from a to b.
• C) move the economy from a to c.
• D) will shift the aggregate supply (A
• S) curve to the right.

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Definitions:

Actual Cause

Refers to the genuine reason that directly leads to an outcome or event, establishing a clear link between an action and its effect.

Res Ipsa Loquitur

A doctrine in tort law that allows the presumption of negligence by the defendant where the accident could not have happened without negligence and the instrument of injury was under the defendant's control.

Negligence

The failure to exercise the care that a reasonably prudent person would exercise in like circumstances, leading to unintended harm.

Proximate Cause

A legal concept that identifies the primary cause of damage or injury in a negligence lawsuit, determining the extent of a defendant's liability.