Assume There Is a Decrease in Government Purchases and Exports

question 11

Multiple Choice

Assume there is a decrease in government purchases and exports.Currently there is a recessionary gap,which implies that

• A)Inventories are accumulating.
• B)Inventories are being depleted.
• C)Desired spending is greater than output.
• D)Investment is greater than saving.

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Definitions:

Primacy Effect

The tendency to remember information at the beginning of a list better than information in the middle or at the end.

Halo Effect

A cognitive bias where an individual's overall impression of a person influences how they feel and think about that person's character.

Phi Phenomenon

A perceptual illusion in which stationary objects shown in rapid succession, such as lights flashing at certain speeds, appear to be moving.

Recency Effect

Recency effect is a memory phenomenon where individuals are more likely to recall the last items in a series better than those in the middle or the beginning.