During a Recession, Consumers May Want to Save More to Provide

question 89

Essay

During a recession, consumers may want to save more to provide themselves with a reserve to cushion possible job losses. Use the Keynesian model to describe the impact of an exogenous decrease in consumption (a decrease in
C) on the equilibrium level of income in the economy. Will aggregate national saving increase?

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Definitions:

Unconditional Positive Regard

A concept in humanistic psychology representing total and unconditional acceptance of a person regardless of their behavior.

Rogers

Carl Rogers was an influential American psychologist who founded the client-centered therapy approach, emphasizing empathy and unconditional positive regard in psychotherapy.

OCEAN

An acronym for the Big Five personality traits model, which includes Openness, Conscientiousness, Extraversion, Agreeableness, and Neuroticism.

Five-Factor Model

A model that describes personality using five broad dimensions, each of which is composed of a constellation of personality traits.