Which of the Following Would Cause Aggregate Demand to Decrease

question 269

Multiple Choice

Which of the following would cause aggregate demand to decrease?

• A) The government increases taxes on both business and personal income.
• B) A drop in the foreign exchange value of the dollar
• C) The Fed increases the amount of money in circulation.
• D) Businesses and households believe that the economy is headed for good times, so they begin to feel increased security about their jobs.

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Definitions:

Rational-emotive

A cognitive-behavioral approach that identifies irrational beliefs, challenges them, and encourages the development of more rational thought patterns to facilitate emotional well-being.

Obsessive-compulsive Disorder

A chronic disorder where a person has uncontrollable, reoccurring thoughts (obsessions) and behaviors (compulsions) that he or she feels the urge to repeat over and over.

Cognitive-behavioral Theorists

Scholars who study and develop therapies based on the idea that cognitive processes influence behavior and emotions, and that altering these processes can lead to change.

Traumatic Event

An incident that causes physical, emotional, or psychological distress or harm, and is experienced as extremely stressful or disturbing.