Suppose Small Business Owners Decide to Spend Less

question 78

Multiple Choice

Suppose small business owners decide to spend less.How will this affect an economy?

• A)It will have no impact since this group makes up a small portion of any economy.
• B)It will decrease the level of income of other people since one person's spending is someone else's income.
• C)It will cause prices for many goods to increase.
• D)It will increase the level of income in the economy since other groups will spend more.

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Definitions:

Sympathetic Nervous System

A part of the autonomic nervous system that prepares the body for rapid response to stressful or emergency situations by increasing heart rate and blood flow, among other effects.

Cannon-Bard Theory

A theory of emotion proposing that emotions and physiological responses like sweating or trembling happen simultaneously.

Two-Factor Theory

A psychological theory that posits emotions are based on physiological arousal and cognitive label.

Cognitive Appraisal

A process by which an individual evaluates and interprets a situation or event, determining its significance and the response it requires.