If the Average Interval Between Firms' Price Adjustments Is Relatively

question 65

Multiple Choice

If the average interval between firms' price adjustments is relatively long

• A) an increase in aggregate demand will cause a relatively short-lived increase in real GDP.
• B) an increase in aggregate demand will cause a relatively long-lived increase in real GDP.
• C) a reduction in aggregate demand will cause a relatively short-lived reduction in real GDP.
• D) none of the above.

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Definitions:

Yerkes-Dodson Law

A theory suggesting that there is an optimal level of arousal for best performance on any task; too little or too much arousal can negatively impact performance.

Attribution Theory

A concept in psychology that explains how individuals pinpoint the causes of their own and others' behaviors.

Appraisal Theory

A theory in psychology that explains how individuals evaluate the significance of events or situations, leading to specific emotional reactions.

Transactional Model

A communication theory that emphasizes the reciprocal nature of the communication process, where each participant alternates roles as sender and receiver.