If Aggregate Demand Grows Only Slightly Faster Than Potential GDP

question 314

Multiple Choice

If aggregate demand grows only slightly faster than potential GDP, then the economy will

• A) experience economic growth with high inflation.
• B) experience recession.
• C) experience economic growth with low inflation.
• D) be at a business-cycle peak.

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Definitions:

Watson

John B. Watson, an American psychologist who established the psychological school of behaviorism, emphasizing the study of observable behavior.

Skinner

B.F. Skinner, a psychologist and behaviorist known for his development of the operant conditioning theory, emphasizing the influence of external stimuli on behavior.

Biological Predisposition

Rephrased from Genetic Predispositions: The inherent genetic makeup that increases the likelihood of an individual developing certain conditions or traits.

Generalization

The process by which individuals apply learned responses to similar but not identical stimuli.