AD - AS Shocks

question 21

Multiple Choice

AD - AS Shocks
-On the graph above,suppose the economy has moved from point H to point G.If the shock was temporary and inflation expectations are adaptive,the economy will next ________.

• A)return to point H
• B)move to point F
• C)move to a point between points G and H
• D)remain at point G
• E)none of the above

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Definitions:

Self-awareness

The conscious knowledge of one's own character, feelings, motives, and desires.

Compensatory Model

In decision-making, this model suggests that individuals assess multiple aspects or attributes, compensating for weaker aspects with stronger ones.

Heuristic

A mental shortcut or rule of thumb that simplifies decision making, though not always perfectly accurate.

Concept

An abstract idea or a mental symbol that represents a class or category of objects, events, or phenomena.