An Economy's Aggregate Demand Curve Shifts Leftward or Rightward by More

question 199

Multiple Choice

An economy's aggregate demand curve shifts leftward or rightward by more than changes in initial spending because of the

• A) net export effect.
• B) wealth effect.
• C) real-balances effect.
• D) multiplier effect.

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Definitions:

Primacy Effect

The tendency to remember items at the beginning of a list better than those in the middle or at the end.

Emotional Impact

The intense effect an event, experience, or information can have on a person’s feelings or emotions.

Working Memory

A cognitive system with a limited capacity that is responsible for temporarily holding information available for processing.

Recall

The mental process of retrieving information from the past, which can vary in accuracy and detail depending on numerous factors, such as the context and the method of encoding.