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Beginning with Long-Run Equilibrium,use the Aggregate Demand and Aggregate Supply

question 21

Essay

Beginning with long-run equilibrium,use the aggregate demand and aggregate supply model to illustrate what happens in the short run when the economy suffers a negative supply shock.


Definitions:

Direct Perception Checking

A method of verifying the accuracy of one's understanding of another person's feelings or intentions through direct communication.

Attribution

The process by which individuals explain the causes of behavior and events, attributing them to either internal dispositions or external situations.

Indirect Perception Checking

Seeking additional information through passive perception, such as observing and listening, either to confirm or refute your interpretations.

Self-Fulfilling Prophecy

Prediction about future actions that is likely to come true because the person believes that it will come true.

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