Assume the Economy Is Operating at a Real GDP Above

question 120

Multiple Choice

Assume the economy is operating at a real GDP above full-employment real GDP. Classical economists would prescribe which of the following policies?

• A) nonintervention
• B) active monetary policy
• C) contractionary
• D) expansionary

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Definitions:

Tolman's Theories

The psychological theories proposed by Edward C. Tolman, emphasizing the importance of cognitive processes and expectations in learning, suggesting that behavior is purposeful and goal-directed.

Excitatory Potential

The potential of a neuron to become activated and fire an action potential, often influenced by the summation of excitatory and inhibitory inputs.

Frustration

An emotional state that occurs when a person is blocked from achieving a goal, leading to feelings of stress, anger, or irritability.

Avoidance Behavior

Actions taken to escape from or to evade situations, activities, or stimuli that are perceived as uncomfortable or leading to an undesired outcome.