Refer to the Accompanying Figure

question 8

Multiple Choice

Refer to the accompanying figure. Based on the figure, if the economy is in short-run equilibrium with output equal to 24,000, then there is ________, and ________ could return the economy to potential output (Y*) .

• A)an expansionary gap; a decrease in autonomous expenditures of 1,000
• B)an expansionary gap; a decrease in autonomous expenditures of 4,000
• C)a recessionary gap; an increase in autonomous expenditures of 1,000
• D)a recessionary gap; an increase in autonomous expenditures of 4,000

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Definitions:

Electra Complex

A psychoanalytic theory describing a girl's sense of competition with her mother for the affection and attention of her father.

Psychosexual Development

Freud's theory of childhood development that focuses on how parents manage their children's sexual and aggressive drives in the first few years is crucial for healthy personality development.

Freud

Sigmund Freud, an Austrian neurologist and the founder of psychoanalysis, a method for treating psychopathology through dialogue between a patient and a psychoanalyst.

Ego

In psychoanalytic theory, the part of the mind that mediates between the conscious and the unconscious and is responsible for reality testing and a sense of personal identity.