Scenario 14-2 The Economy Is in Long-Run Equilibrium. Suddenly, Due to Corporate

question 103

Multiple Choice

Scenario 14-2
The economy is in long-run equilibrium. Suddenly, due to corporate scandals, a recession experienced by a major trading partner, and the loss of confidence among policymakers, citizens become pessimistic concerning the future. They maintain this level of pessimism for a long time.
-Refer to the Scenario 14-2. How does the new long-run equilibrium differ from the original one?

• A) Both the price level and real GDP are higher.
• B) Both the price level and real GDP are lower.
• C) The price level is the same and real GDP is lower.
• D) The price level is lower and real GDP is the same.

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Definitions:

Robert Merton

A prominent American sociologist who contributed to the sociology of science and developed the theory of deviance, including the concept of self-fulfilling prophecy.

Racial Conflict

A type of conflict arising when individuals or groups from different racial or ethnic backgrounds come into opposition or combat due to perceived or actual differences and inequalities.

Spoiled Identity

A concept introduced by Erving Goffman, referring to an identity that has been tarnished by a stigma, leading to societal disapproval or discrimination.

Stigmatized

Branded with a mark of disgrace or infamy; individuals or groups may be stigmatized due to attributes, behaviors, or identities that are considered socially unacceptable.