From an Initial Long-Run Equilibrium, If Aggregate Demand Grows Faster

question 9

Multiple Choice

From an initial long-run equilibrium, if aggregate demand grows faster than long-run and short-run aggregate supply, then the federal government would most likely

• A)decrease the required reserve ratio.
• B)decrease government spending.
• C)decrease oil prices.
• D)decrease tax rates.
• E)decrease the value of the Canadian dollar.

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Definitions:

Theory of Reasoned Action

A psychological theory that predicts an individual's behavior based on their intention to perform that behavior, which is influenced by attitudes towards the behavior and subjective norms.

Planned Behavior

Refers to the Theory of Planned Behavior, which predicts how individuals' intentions toward behaviors are influenced by attitudes, subjective norms, and perceived behavioral control.

Attitude Strength

The durability and impact of an attitude on behavior and thoughts, with stronger attitudes being more consistent, resistant to change, and predictive of behavior.

Cognitive Dissonance

The mental discomfort experienced by an individual who holds two or more contradictory beliefs, ideas, or values simultaneously.