Consider the Basic AD/AS Model,and Suppose There Is a Negative

question 138

Multiple Choice

Consider the basic AD/AS model,and suppose there is a negative output gap.If an expansionary fiscal policy is pursued and the AS curve shifts leftward unexpectedly,the fiscal policy may be ________,and real GDP may ________ potential GDP.

• A)too weak; stay below
• B)too weak; rise above
• C)too strong; stay below
• D)too strong; rise above
• E)appropriate; equal

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Definitions:

Cohort

A group of individuals sharing a common characteristic, typically born around the same time, who are studied over a period of time.

Psychoanalytic Theory

A theory of psychology and human behavior that emphasizes unconscious motives and conflicts as the primary determinants of human behavior.

Unconscious Needs

Desires or requirements of which an individual might not be aware but which influence behaviors and emotions.

Inner Drives

Inherent motivations or impulses within an individual that propel them to act or pursue certain goals.