Pessimism Suppose the Economy Is in Long-Run Equilibrium. Then Because of of Corporate

question 106

Multiple Choice

Pessimism
Suppose the economy is in long-run equilibrium. Then because of corporate scandal, international tensions, and loss of confidence in policymakers, people become pessimistic regarding the future and retain that level of pessimism for some time.


-Refer to Optimism.How is the new long-run equilibrium different from the original one?

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

---

Definitions:

Abnormal Behaviour

Actions, thoughts, or emotions that are atypical within the cultural context and may impair functioning.

Cognitive Confusion

A state of being perplexed or unclear in one's mind about something, often affecting decision-making and problem-solving skills.

Maladaptive Behaviour

Behavior that is counterproductive or interferes with everyday living and personal effectiveness, often a response to environmental stressors.

Thomas Szasz

He was a psychiatrist known for his criticisms of psychiatry and the medicalization of mental illnesses, advocating that mental illness is more about social and ethical concerns than medical ones.