When Potential GDP Increases,short-Run Aggregate Supply Also Increases,but Long-Run Aggregate

question 122

True/False

When potential GDP increases,short-run aggregate supply also increases,but long-run aggregate supply does not change.

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Definitions:

Self-Fulfilling Prophecy

A forecast that becomes a reality because of the mutual influence between how one thinks and acts, leading to its own fulfillment.

Postdecisional Dissonance

The psychological discomfort one feels after making a difficult decision, often leading to regret or rationalization of the choice.

Insufficient Justification Effect

A phenomenon where individuals modify their attitudes or beliefs to align with their actions, especially when those actions lack adequate external justification.

Fundamental Attribution Error

The tendency to overemphasize internal characteristics for someone else's behavior and underemphasize situational factors.