Which of the Following Will Lead to an Increase in Aggregate

question 8

Multiple Choice

Which of the following will lead to an increase in aggregate demand in the United States?

• A) a higher price level
• B) an increase in the real interest rate
• C) an increase in wealth due to a substantial appreciation in the value of stocks
• D) a decrease in real income in Japan and Western Europe

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Definitions:

Confirmation Bias

The tendency to search for, interpret, favor, and recall information in a way that confirms one's preexisting beliefs or hypotheses.

Representation Bias

Representation bias refers to the cognitive bias where individuals inaccurately assess the probability of an event based on the ease with which examples come to mind, often due to how frequently they are portrayed or mentioned.

Creativity

The ability to generate or recognize ideas, alternatives, or possibilities that may be useful in solving problems, communicating with others, and entertaining ourselves and others.

Novel Idea

A new, original, or innovative concept that has not been thought of before.