-In the Above Figure, If the Economy Is Initially at Point

question 59

Multiple Choice

-In the above figure, if the economy is initially at point D and taxes are cut, if potential GDP does not change then the economy will

• A)move to point B.
• B)move to point A.
• C)move to point C.
• D)stay at point D.

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Definitions:

Abraham Maslow

A renowned American psychologist who developed the concept of Maslow's hierarchy of needs, a theory that suggests psychological well-being is based on satisfying fundamental human needs.

Overjustification Effect

A psychological effect where introducing an external incentive for an activity someone already finds rewarding leads to a reduction in intrinsic motivation.

Externality Hypothesis

A theory suggesting that the costs or benefits of an individual’s or a firm’s actions are not fully borne or received by that individual or firm, but also affect others who were not involved in the original action.

Maslow's Hierarchy

A theory in psychology proposed by Abraham Maslow that human needs are arranged in a hierarchy from most basic physiological needs to higher-level needs for self-actualization.