Refer to the Graph Above

question 115

Multiple Choice

Refer to the graph above. If the economy is initially at equilibrium at the intersection of AD₁ and AS₁ and there is a tax cut, then, from a skeptical mainstream perspective, the immediate impact is that aggregate:

• A) Demand would increase to AD₂ and aggregate supply would increase to AS₂
• B) Demand would increase to AD₂ and aggregate supply would remain at AS₁
• C) Supply would increase to AS₂ and aggregate demand would remain at AD₁
• D) Demand would remain at AD₁ and aggregate supply would remain at AS₁

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Definitions:

Nomothetic

An approach in psychology that focuses on studying general laws and principles that apply widely across individuals.

Idiographic

Pertaining to the study or approach that focuses on individual cases or events, emphasizing the unique aspects of each.

Blind Design

An experiment in which participants do not know whether they are in the experimental or the control condition. Also known as masked design, now the preferred term.

Idiographic Approach

A perspective in psychology that focuses on understanding the unique, subjective experiences and motivations of individuals, as opposed to general or universal principles.