An Expenditure-Changing Policy

question 3

Multiple Choice

An expenditure-changing policy

• A) alters the direction of the economy's total demand for goods and services.
• B) alters the level of the economy's total demand for goods and services.
• C) has no effect on aggregate demand.
• D) is the same thing as an expenditure-switching policy.
• E) affects aggregate supply but not aggregate demand.

---

Definitions:

Group Polarization

The phenomenon whereby a group's prevailing opinions or decisions become more extreme than the individual initial inclinations after group discussion.

Risky Shift

The phenomenon where groups make riskier decisions collectively than individuals would when making decisions alone.

Social Constructionism

The theory that social phenomena develop in social contexts as a result of human interpretation, interaction, and negotiation rather than inherent traits.

Normative Influence

The impact of the norms of a social group on an individual's behavior, driving conformity to group standards to gain acceptance or avoid social sanction.