Consider the Basic AD/AS Model

question 26

Multiple Choice

Consider the basic AD/AS model.Suppose firms are currently producing beyond their normal capacity.A change in AD leads to a relatively

• A)large change in price level and a large change in real GDP.
• B)large change in price level and a small change in real GDP.
• C)small change in price level and a large change in real GDP.
• D)small change in price level and a small change in real GDP.
• E)no change in both price and output.

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Definitions:

Behaviorist

A psychologist who studies and applies principles of behaviorism, a theory that focuses on observable behaviors and discards theories involving the mind.

Cognitive Neuroscientist

A scientist who studies the biological processes and aspects that underlie cognition, with a particular focus on the neural connections in the brain which are involved in mental processes.

Introspection

The process of self-observation concerning one's psychological and emotional patterns.

Freudian Psychologists

Professionals who apply Sigmund Freud's theories of psychoanalysis to understand human behavior and mental processes.