While Price Misperceptions Can Cause an Increase in Labour Supply

question 33

Multiple Choice

While price misperceptions can cause an increase in labour supply and GDP in the short-run, in the long run:

• A)money is neutral.
• B)money negatively affects real GDP.
• C)labour supply ultimately declines.
• D)all of the above.

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Definitions:

Eustress

Positive stress which is perceived as beneficial for the experiencer, often associated with improved performance or well-being.

Activating Event

An incident in the external environment or a thought that triggers a psychological response.

General Adaptation Syndrome (GAS)

General Adaptation Syndrome (GAS) is a theoretical model describing the body's short-term and long-term reactions to stress, including stages of alarm, resistance, and exhaustion.

Resistance Stage

The second phase of the General Adaptation Syndrome, where the body mobilizes its defenses to adapt to stressors.