Which of the Following Is Consistent with the Keynesian Theory

question 109

Multiple Choice

Which of the following is consistent with the Keynesian theory?

• A)Irrational waves of pessimism would cause a decrease in aggregate demand and increase unemployment.
• B)Irrational waves of optimism would cause a reduction in aggregate demand and decrease unemployment.
• C)Changes in business and consumer expectations generally stabilize the economy.
• D)Changes in consumer confidence are irrelevant for the economy.

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Definitions:

Hardwired Heuristics

Cognitive shortcuts or rules of thumb that are ingrained or innate, often leading to quick decision-making or judgments.

Behavior Change

A modification in an individual's actions, habits, or attitudes, often targeted through various interventions for health or social improvement.

Faster Decisions

The process of making choices or conclusions more rapidly, often necessary in dynamic or time-sensitive environments for efficiency or competitive advantage.

Positive Outcomes

Results or consequences that are desirable, beneficial, or have a good impact on individuals or groups.