The Same Brand of Chocolate Truffles Tasted Better to Julia

question 115

Multiple Choice

The same brand of chocolate truffles tasted better to Julia when she thought they cost $20 a pound than when she thought they cost half that much.This best illustrates the impact of

• A) the volley principle.
• B) top-down processing.
• C) synesthesia.
• D) precognition.

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Definitions:

Aggregate Spending

The total amount of spending by all sectors of an economy on goods and services.

Inflation

The speed at which the cumulative price for goods and services heightens, lowering the power to make purchases.

Money Demand

The desire or need for holding money as opposed to investing or spending it.

Equation of Exchange

The equation of exchange is a macroeconomic formula that relates the money supply, its velocity, the price level, and an index of expenditures in an economy, typically expressed as MV = PQ.