-Refer to the Above Diagram and Assume That Prices and Wages

question 15

Multiple Choice

-Refer to the above diagram and assume that prices and wages are flexible both upward and downward in the economy. In the long run AD-AS model:

• A) demand-pull inflation would involve a shift of curve D to the right.
• B) cost-push inflation would involve a shift of curve B downward.
• C) recession would involve a leftward shift of curve A.
• D) frictional unemployment would be zero in the long run.

---

Definitions:

Sizing Graphics

The process of adjusting the dimensions and scale of graphical elements to fit specific requirements or formats.

Single-Spaced

Referring to a document format where there is very little space between lines of text, typically used to save space or fit more text on a page.

Full Justification

A type of text alignment where the text is spaced so the left and right sides of the text block both align with their respective margins.

Chunking

A strategy of breaking down information into smaller, manageable units to make it easier to understand and remember.