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Suppose That Changes in Aggregate Demand Tended to Be Infrequent

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Essay

Suppose that changes in aggregate demand tended to be infrequent and that it takes a long time for the economy to return to long-run output. How would this affect the arguments of those who oppose using policy to stabilize output?


Definitions:

Necker Cube

An optical illusion of a wireframe cube that can be perceived from different perspectives.

Top-Down Processing

A cognitive process that initiates with our thoughts, which flow down to lower-level functions such as the senses; relying heavily on previous experience and expectations in perception.

Organizational Rules

The guidelines and procedures established within an organization to regulate the behavior and actions of its members.

Gestalt Psychologists

Gestalt psychologists focus on understanding how people perceive and make sense of visual information, emphasizing that the whole of anything is greater than its parts.

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