Figure 15-11 -Refer to Figure 15-11.In the Dynamic Model of AD-AS in of AD-AS

question 183

Multiple Choice

Figure 15-11
-Refer to Figure 15-11.In the dynamic model of AD-AS in the figure above,if the economy is at point A in year 1 and is expected to go to point B in year 2,and the Federal Reserve pursues no policy,then at point B

• A)there is pressure on wages and prices to rise.
• B)the unemployment rate is very,very low.
• C)firms are operating above their normal capacity.
• D)the economy is below full employment.
• E)incomes and profits are rising.

---

Definitions:

Defense Mechanism

Psychological strategies used unconsciously by individuals to protect themselves from anxiety and cope with reality or maintain self-image.

Fixation

An obsessive interest or feeling towards a particular object or idea that can result from unresolved conflicts, particularly those stemming from early childhood.

Biting Sarcasm

A form of sarcasm that is particularly cutting or cruel, often intended to hurt or mock.

Exaggerated Denial

An overemphasis on denying reality or facts, often as a psychological defense mechanism.