If Both Real GDP and the General Price Level Fell

question 38

Multiple Choice

If both Real GDP and the general price level fell following the September 11^th terrorist attack,

• A)the negative aggregate supply shock was smaller than the negative aggregate demand shock.
• B)the negative aggregate supply shock was larger than the negative aggregate demand shock.
• C)the aggregate supply shock was negative, but the aggregate demand shock must have been positive.
• D)both the aggregate supply shock and the aggregate demand shock must have been, ironically, positive.

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Definitions:

Adaptation-Level Phenomenon

The psychological principle that states individuals judge new experiences based on their past experiences.

James-Lange Theory

A theory suggesting that emotions are the result of physiological reactions to events.

Catharsis Hypothesis

The theory that expressing or experiencing strong emotions releases them and reduces their impact, leading to relief.

Aggressive Urges

Innate or learned desires to act or react in a hostile, forceful, or violent manner towards oneself or others.