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.

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Definitions:

Successful Events

Occurrences or activities that achieve their intended goals or are considered positive by the majority of participants.

Past Failures

Previous instances of not achieving desired or intended outcomes, serving as lessons for future endeavors.

System-1 Thinking

A fast, automatic, and often emotional way of thinking, as described by psychologist Daniel Kahneman.

System-2

Refers to a mode of thinking in Daniel Kahneman's dual-process theory, characterized by more deliberate, effortful, and analytical reasoning.