12.3 Shocks to the System

question 20

Multiple Choice

12.3 Shocks to the System
Refer to the information provided in Figure 12.3 below to answer the questions that follow. Figure 12.3
-Refer to Figure 12.3. Assume the economy is at Point A. Higher oil prices shift the aggregate supply curve to AS₂. If the government decides to counter the effects of higher oil prices by increasing net taxes, then the price level will be ________ than P₂ and output will be ________ than Y₂.

• A) greater; greater
• B) greater; less
• C) less; less
• D) less; greater

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Definitions:

Observational Learning

A learning process through which individuals acquire new behaviors, skills, or attitudes by watching others, also known as modeling.

Attention

The mental activity of focusing attention on a single element of one's surroundings, while disregarding other stimuli.

Reinforcement

In behavioral psychology, a process that increases the likelihood of a behavior being repeated, which can be positive (adding a desirable stimulus) or negative (removing an aversive stimulus).

Operant Conditioning

A learning process in which the strength of a behavior is modified by reinforcement or punishment.