The Wealth Effect Helps Explain the Slope of the Aggregate

question 175

Multiple Choice

The wealth effect helps explain the slope of the aggregate demand curve.This effect is

• A)relatively important in the United States because expenditures on consumer durables is very responsive to changes in wealth.
• B)relatively important in the United States because consumption spending is a large part of GDP.
• C)relatively unimportant in the United States because money holdings are a small part of consumer wealth.
• D)relatively unimportant because it takes a large change in wealth to make a significant change in interest rates.

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Definitions:

Gestalt Therapist

A practitioner of Gestalt therapy, a form of psychotherapy focusing on the individual's experience in the present moment, the therapist-client relationship, the environmental and social contexts of one's life, and the self-regulating adjustments people make as a result of their overall situation.

Gestalt Therapy

A form of psychotherapy that emphasizes personal responsibility and focuses on the individual's experience in the present moment, the therapist-client relationship, the environmental and social contexts of a person's life, and the self-regulating adjustments people make as a result of the overall situation.

Empty Chair

A therapeutic technique in psychology where a client speaks to an imaginary person or an object placed in an empty chair, used to express thoughts and feelings freely.

Meditation

A group of techniques that involve focusing attention on an object, a word, one’s breathing, or one’s body movements in an effort to block out all distractions, to enhance well-being, and to achieve an altered state of consciousness.