If a Contractionary Gap Is Cured by Increasing Aggregate Demand

question 15

Multiple Choice

If a contractionary gap is cured by increasing aggregate demand,

• A)both c and e are correct
• B)both d and e are correct
• C)real wages fall because prices rise
• D)prices rise causing real wages to increase
• E)money wages decrease as prices decrease

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Definitions:

Danger

The possibility of suffering harm or injury; a situation involving exposure to risk.

Bolles

Robert C. Bolles was a psychologist known for his S-S (stimulus-stimulus) learning theory, emphasizing that animals learn expectations about the outcomes of their actions.

Social Attachment

The emotional bond between individuals, critical for personal development and socialization.

Prefrontal Cortex

A region of the frontal lobes of the brain implicated in a variety of complex behaviors, including planning, decision-making, and moderating social behavior.