Suppose the Economy Was in Long-Run Equilibrium When a Sudden

question 2

Multiple Choice

Suppose the economy was in long-run equilibrium when a sudden decline in the stock market took place.What happens in the short run after the decline in the stock market?

• A) Both the price level and real GDP rise.
• B) The price level falls and real GDP does not change.
• C) The price level does not change and real GDP falls.
• D) Both the price level and real GDP fall.

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Definitions:

Self-actualization

A concept in humanistic psychology representing the realization of one's potential and self-fulfillment as the highest expression of a person's ability.

Maslow

He theorized that people are motivated to achieve certain needs and that some needs take precedence over others, starting with physiological needs and ending with self-actualization.

Self-actualizers

Individuals who achieve their highest potential in their own unique way, fulfilling what Abraham Maslow termed self-actualization.

Emotionally Healthy People

Individuals who exhibit a high level of emotional intelligence, including awareness, control, and expression of emotions in a balanced and constructive manner.