In the Short Run, a Decrease in Aggregate Demand Will

question 43

Multiple Choice

In the short run, a decrease in aggregate demand will lead to

• A)no change in the price level and a decrease in real GDP.
• B)a decrease in the price level and an increase in real GDP.
• C)an increase in the price level and an increase in real GDP.
• D)an increase in the price level and a decrease in real GDP.
• E)a decrease in the price level and an increase in the unemployment rate.

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Definitions:

Collective Unconscious

A concept proposed by Carl Jung referring to the part of a person's unconscious which is derived from ancestral memory and experience shared by all humankind.

Biological Drives

Basic, instinctual processes that motivate organisms to fulfill their needs, such as hunger, thirst, and the need for sleep.

Defense Mechanisms

Methods applied without conscious awareness to safeguard against the unease generated by thoughts or feelings that are not acceptable.

Reaction Formation

is a defense mechanism where an individual unconsciously replaces unacceptable feelings or impulses with their opposites, often seen in behaviors that contradict true feelings.