The Impact of Large Cuts in Defense Spending in the Long-Run

question 44

Multiple Choice

The impact of large cuts in defense spending in the long-run includes

• A) an increase in actual GDP.
• B) an increase in potential GDP.
• C) a reduction in inflation.
• D) no change in GDP.
• E) b and c.

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Definitions:

Illusion Of Control

The tendency for people to overestimate their ability to control events; an unrealistic belief in one's influence over external events.

Gamblers

Individuals who risk something of value on the outcome of an event with an uncertain result, often with the primary intent of winning additional money or goods.

Regression Toward The Mean

The tendency for extreme or unusual scores or events to fall back (regress) toward the average.

Unusual Scores

Scores that significantly deviate from the norm or average in any type of assessment, indicating atypical performance or results.