Figure 15-12 -Refer to Figure 15-12.In the Dynamic AD-AS Model,the Economy Is

question 255

Multiple Choice

Figure 15-12
-Refer to Figure 15-12.In the dynamic AD-AS model,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 policy.This will result in

• A)unemployment rates higher than what would occur if no policy had been pursued.
• B)inflation rates higher than what would occur if no policy had been pursued.
• C)potential real GDP levels lower than what would occur if no policy had been pursued.
• D)real GDP levels higher than what would occur if no policy had been pursued.

---

Definitions:

Equilibrium Strategies

The optimal plans of action for players in a game, where each player's strategy is the best response to the strategies of others.

Rebates

A partial refund to someone who has paid too much for tax, rent, or a utility, or a marketing strategy offering a discount on an initial purchase back after the fact.

Firms

Business organizations or entities that produce goods or provide services, ranging in size from single proprietorships to large corporations.

Cooperative Games

Cooperative games are strategic games where players can form binding agreements to cooperate and share the payoffs.