The Mainstream View of Macro Instability Is That

question 252

Multiple Choice

The mainstream view of macro instability is that

• A) changes in the money supply directly cause changes in aggregate demand and thus cause changes in real GDP.
• B) changes in investment shift the aggregate demand curve and thus cause changes in real GDP.
• C) bursts of innovation put the economy on an unsustainable growth path, eventually producing recession.
• D) changes in technology and resource availability are the two main sources of fluctuations of real GDP.

Identify the role of advertising and external changes (e.g., technological, socio-economic) in affecting demand for goods.

Distinguish between movements along the demand or supply curve versus shifts in these curves.

Explain the economic reasoning for specific market actions, such as pricing strategies or responses to market changes.

Understand the definition and characteristics of inferior goods.

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Definitions:

Situational Attribution

The process of assigning the cause of behavior to an external situation or environment, rather than to internal characteristics.

Personal Control

The degree to which an individual believes they have control over the events in their life.

Pressured to Conform

The feeling that one must align their attitudes, beliefs, or behaviors with those of a larger group.

Social Control

Refers to the mechanisms, strategies, and practices employed by society to regulate individual behavior and maintain social order.