Consider the Basic AD/AS Model

question 19

Multiple Choice

Consider the basic AD/AS model.When wage rates rise faster than the increase in labour productivity,the

• A)AD curve shifts left.
• B)AS curve shifts upward.
• C)output gap falls.
• D)output gap increases.
• E)AS curve shifts downward.

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Definitions:

Pluralistic Norm Theory

A theory suggesting that within a diverse society, multiple norms and values coexist and influence behavior.

Cultural Values Theory

The view that people in groups use members’ opinions about the position valued in the wider culture, and then adjust their views in that direction for social approval reasons.

Group Polarisation

The tendency of a group to make decisions that are more extreme than the initial inclination of its members.

Groupthink

A psychological phenomenon that occurs within a group of people, where the desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.