An Economic Contraction Caused by a Shift in Aggregate Demand

question 184

Multiple Choice

An economic contraction caused by a shift in aggregate demand causes prices to

• A) rise in the short run, and rise even more in the long run.
• B) rise in the short run, and fall back to their original level in the long run.
• C) fall in the short run, and fall even more in the long run.
• D) fall in the short run, and rise back to their original level in the long run.

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Definitions:

Assimilation

The cognitive process of fitting new information into existing cognitive schemas, perceptions, and understanding.

Basic Trust

A concept in psychology describing the fundamental sense of safety and reliability in the world, often developed in early childhood.

Conscious Memory

The ability to recall and recognize information and past experiences that one can consciously acknowledge and describe.

Schemas Associated

Mental structures that represent aspects of the world and influence understanding, recognition, and recall by organizing information.