Suppose a Stock Market Crash Makes People Feel Poorer

question 203

Multiple Choice

Suppose a stock market crash makes people feel poorer. What are the effects of this decrease in wealth?

• A)a decrease in consumption, which shifts aggregate supply left
• B)a decrease in consumption, which shifts aggregate demand left
• C)a increase in consumption, which shifts aggregate supply right
• D)a increase in consumption, which shifts aggregate demand right

---

Definitions:

Socially Expected

Behaviors or norms that are anticipated and considered appropriate within a given society or cultural context.

Normative Social Influence

The force exerted by others that prompts us to align our actions to be cherished and welcomed by them.

Asch's Line-Judgment Experiment

A study on conformity that demonstrated the power of social pressure on individuals to conform to an incorrect majority view.

Deindividuation

A psychological state where an individual loses self-awareness and self-restraint, often occurring within group settings.