Suppose That You Have the Following Information About the Economy,where

question 135

Multiple Choice

Suppose that you have the following information about the economy,where all figures are in millions of dollars:
Full employment output = $2,000
Consumption = $1,200
Investment = $400
Government spending = $500
Net exports = -$200
Because short-run output is ________ full employment output,in the long run we would expect the price level to ________.

• A) less than; rise
• B) less than; fall
• C) greater than; rise
• D) greater than; fall
• E) equal to; remain unchanged

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Definitions:

Downward Social Comparisons

This occurs when individuals compare themselves to others who are worse off in order to feel better about their own situation or abilities.

Self-Image

The personal viewpoint of an individual about themselves, including beliefs about appearance, personality, and capabilities.

Reference Group

A group that individuals use as a standard for evaluating themselves and their own behaviors, influencing their attitudes and behaviors.

Mainstream American Culture

The set of norms, behaviors, beliefs, and values that are widely accepted and practiced by the majority of the American population.