Within the Aggregate Demand-Aggregate Supply Framework, Monetarists Argue That a Change

question 203

Multiple Choice

Within the aggregate demand-aggregate supply framework, monetarists argue that a change in aggregate

• A) demand will have a large effect on the price level but a temporary effect on output.
• B) demand will have a small effect on the price level but a permanent effect on output.
• C) demand will have a large effect on the price level and a large effect on output.
• D) supply will have a large effect on the price level but a temporary effect on output.

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Definitions:

Cognitive Dissonance

The psychological discomfort experienced when holding two or more contradictory beliefs, values, or attitudes, leading to motivation for change to reduce the dissonance.

Boring Task

A monotonous or uninteresting activity that requires completion.

Festinger

Refers to Leon Festinger, a psychologist known for the theory of cognitive dissonance, which explores the discomfort felt when holding conflicting beliefs, values, or attitudes.

Cognitive Dissonance

A state of psychological discomfort arising from holding two or more conflicting beliefs, values, or attitudes simultaneously.