At Long-Run Macroeconomic Equilibrium

question 215

Multiple Choice

At long-run macroeconomic equilibrium,

• A) an inflationary gap exists.
• B) real GDP equals potential GDP.
• C) a recessionary gap exists.
• D) real GDP is less than potential GDP but is as close as it is possible to be.

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Definitions:

Social Facilitation

When the mere presence of others improves performance.

Group Polarization

The phenomenon by which a group's prevailing attitudes or beliefs become more extreme following group discussions, as members tend to support more extreme positions.

Groupthink

A psychological phenomenon that occurs within a group of people in which the desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.

Door-In-The-Face

A persuasion technique involving making a large, unreasonable request that is likely to be refused in order to increase the likelihood of agreement to a smaller request later.