The Keynesian Cause-And-Effect Sequence Predicts That a Decrease in the Money

question 170

Multiple Choice

The Keynesian cause-and-effect sequence predicts that a decrease in the money supply will cause interest rates to:

• A) fall, boosting investment and shifting the AD curve rightward, leading to an increase in real GDP.
• B) fall, boosting investment and shifting the AD curve rightward, leading to a decrease in real GDP.
• C) rise, cutting investment and shifting the AD curve rightward, leading to an increase in real GDP.
• D) rise, boosting investment and shifting the AD curve rightward, leading to an increase in real GDP.
• E) rise, cutting investment and shifting the AD curve leftward, leading to a decrease in real GDP.

---

Definitions:

Actor-Observer Effect

A psychological bias where people tend to attribute their own actions to situational factors while attributing others' actions to their personalities or character.

Fundamental Attribution Error

The tendency to overemphasize personality-based explanations for behaviors observed in others while underestimating the influence of external factors.

Social-Cognitive Perspective

A view in psychology that focuses on how people learn through observing others, and how they control their behavior through self-regulation and social interaction.

Aggressive Skills

Behaviors aimed at causing harm or asserting dominance, often used in conflict situations.