The Short-Run and Long-Run Aggregate Supply Curves Remain Stable, and a Decrease

question 303

Multiple Choice

The short-run and long-run aggregate supply curves remain stable, and a decrease in aggregate demand occurs. What is the result in the short run?

• A) An increase in the price level and real GDP will occur.
• B) A period of expansion and a rise in the unemployment rate could occur.
• C) A period of recession and a rise in the unemployment rate could occur.
• D) The price level will fall but real GDP will remain the same.

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Definitions:

Personal Control

An individual's belief in their ability to influence events and their outcomes in their life.

Reciprocal Determinism

Reciprocal determinism is a psychological theory proposing that an individual's behavior is influenced by both their environment and personal factors, which in turn influence each other.

Identification

The process of recognizing or establishing as being a particular person or thing; verification of the identity of a person or thing.

Self-Serving Bias

Self-serving bias is the tendency to attribute positive events to one's own character but attribute negative events to external factors, often serving to maintain one's self-esteem.