Which of the Following Likely Occurs When Households and Firms

question 179

Multiple Choice

Which of the following likely occurs when households and firms are pessimistic?

• A) Increased spending,increases aggregate demand,rising real GDP and a falling unemployment rate.
• B) Decreased spending,increases aggregate demand,rising real GDP and a falling unemployment rate.
• C) Decreased spending,decreased aggregate demand,falling real GDP and a falling unemployment rate.
• D) Decreased spending,decreased aggregate demand,falling real GDP and a rising unemployment rate.

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Definitions:

Sympathetic Nervous System

The Sympathetic Nervous System is part of the autonomic nervous system that activates the body's rapid involuntary response to stressful or emergency situations, also known as the "fight or flight" response.

Adrenal Glands

Small, triangular glands located on top of both kidneys that produce a variety of hormones, including adrenaline and cortisol, involved in stress responses.

Epinephrine

Also known as adrenaline, a hormone and neurotransmitter involved in the body's fight or flight response, increasing heart rate, muscle strength, and blood pressure.

Norepinephrine

A neurotransmitter and hormone involved in the body's fight or flight response; it affects attention and responding actions in the brain.