Other Things Equal, in the Short Run a Higher Price

question 290

Multiple Choice

Other things equal, in the short run a higher price level leads households to

• A)increase consumption and firms to buy more capital goods.
• B)increase consumption and firms to buy fewer capital goods.
• C)decrease consumption and firms to buy more capital goods.
• D)decrease consumption and firms to buy fewer capital goods.

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Definitions:

Defense Mechanism

Psychological strategies brought into play by the unconscious mind to manipulate, deny, or distort reality in order to defend against feelings of anxiety and unacceptable impulses and maintain self-schema.

Threatening

Presenting a danger or harm, creating a sense of fear or insecurity.

Neo-Freudian

A term referring to psychologists who accepted the basic components of Freud's theory but modified and expanded upon them.

Childhood Sexual Instincts

Early developmental phases where children explore their bodies and experience sexual feelings, as discussed in psychoanalytic theory.