Consider the Nature of Macroeconomic Equilibrium

question 36

Multiple Choice

Consider the nature of macroeconomic equilibrium. If, at a particular price level, aggregate output demanded is less than that supplied by producers, then

• A)the aggregate demand curve will shift to the right, re- establishing an equilibrium.
• B)the price level will decline toward its equilibrium value.
• C)the aggregate supply curve will shift to the left, re- establishing an equilibrium.
• D)the aggregate supply curve will shift to the right, re- establishing an equilibrium.
• E)the price level will rise toward its equilibrium value.

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Definitions:

Information

Data, knowledge, or insights that can be used for making decisions, informing oneself or others, or as a means to understand various aspects of reality.

Heuristics

Mental shortcuts or rules of thumb that simplify decision making, often used in problem-solving and decision-making processes.

Rational Calculations

The process of making decisions based on logical reasoning, often assuming that individuals aim to maximize utility or profit.

Behavioral Economists

Researchers and practitioners who study the effects of psychological, cognitive, emotional, cultural, and social factors on the economic decisions of individuals and institutions.