Keynes Argued That Aggregate Demand Is

question 12

Multiple Choice

Keynes argued that aggregate demand is

• A)stable,because the economy tends to return to its long-run equilibrium quickly after any disturbance to aggregate demand.
• B)stable,because changes in consumption are mostly offset by changes in investment and vice versa.
• C)unstable,because waves of pessimism and optimism create fluctuations in aggregate demand.
• D)unstable,because of long and variable policy lags that worsen economic fluctuations.

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Definitions:

Psychoanalytic Theory

A theory developed by Sigmund Freud that emphasizes unconscious processes and childhood experiences as the primary factors in personality development and psychological issues.

Internalized

The process of integrating attitudes, values, or norms into one's own belief system or behavior.

Countertransference

The emotional reaction of a therapist towards a client, influenced by the therapist's own background, beliefs, and experiences.

Transference

In psychotherapy, it refers to the phenomenon where patients project feelings about important people in their lives onto the therapist.