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Suppose a Shift in Aggregate Demand Creates an Economic Contraction

question 177

Multiple Choice

Suppose a shift in aggregate demand creates an economic contraction. If policymakers can respond with sufficient speed and precision, how can they offset the initial shift?


Definitions:

Negative Reinforcement

A behavioral psychology principle where the removal of an unfavorable outcome or stimulus strengthens a behavior or increases its likelihood of recurrence.

Unpleasant Events

Occurrences or situations that cause discomfort, distress, or unhappiness.

Behaviour Repeated

The act of performing the same action or behavior multiple times, which can lead to habit formation or learning.

Stimulus Generalization

The tendency for the conditioned response to be evoked by stimuli that are similar to the stimulus that was initially conditioned.

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