Suppose There Is a Change in Government Purchases

question 123

Multiple Choice

Suppose there is a change in government purchases.Under what circumstances will such a change have the greatest effect on the economy in the short run?  

• A) if the aggregate demand curve is relatively flat 
• B) if the aggregate demand curve is relatively steep 
• C) if the short-run aggregate supply curve is relatively flat 
• D) if the aggregate demand curve is vertical

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Definitions:

Benevolent Beliefs

Positive but patronizing beliefs and attitudes that can unintentionally perpetuate inequality, often viewed as harmless or even supportive by those who hold them.

Justification Suppression Model

The idea that people endorse and freely express stereotypes in part to justify their own negative affective reactions to outgroup members.

Stereotype Threat Hypothesis

The stereotype threat hypothesis proposes that individuals at risk of confirming negative stereotypes about their social group may underperform in relevant tasks due to increased stress and anxiety.

System Justification Hypothesis

A theory suggesting that people have a psychological inclination to defend and justify the existing social, economic, and political systems, even at a cost to personal and group interest.