Suppose That Consumers Become Pessimistic About the Future Health of the Economy

question 160

Essay

Suppose that consumers become pessimistic about the future health of the economy. What will happen to aggregate demand and to output? What might the president and Congress have to do to keep output stable?

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Definitions:

Punitive Damages

Monetary compensation awarded in a lawsuit that goes beyond what is necessary to compensate the plaintiff and is intended to punish the defendant for particularly egregious conduct.

Gross Negligence

An action committed with extreme reckless disregard for the property or life of another person.

Duty To Render

Is the obligation to provide a service or perform specific tasks under a contract or legal agreement.

Conscious Negligence

A situation where an individual is aware of the potential harm their lack of care or failure to act might cause, but disregards the risks.