Beginning from Long-Run Equilibrium at Point E₁ in Exhibit 6

question 41

Multiple Choice

Beginning from long-run equilibrium at point E₁ in Exhibit 6, the aggregate demand curve shifts to AD₂. The real GDP and price level (CPI) in short-run equilibrium will be:

• A)$10 billion and 200.
• B)$10 billion and 150.
• C)$10 billion and 100.
• D)$4 billion and 150.

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Definitions:

Cognitive Appraisal Theory

A model of emotion stating that a person's cognitive response to a situation determines their emotional experience.

Cognitive Dissonance Theory

A theory proposing that people experience discomfort (dissonance) when their beliefs or behaviors are inconsistent, often leading to a change in one to reduce the dissonance.

Cannon-Bard Theory

A theory of emotion that argues emotions and physiological responses occur simultaneously and independently, rather than one causing the other.

James-Lange Theory

A theory of emotion suggesting that emotions occur as a result of physiological reactions to events, implying that physiological arousal precedes the experience of emotion.