If the Government Increases Aggregate Demand When the Economy Is

question 190

Multiple Choice

If the government increases aggregate demand when the economy is at both short-run and long-run equilibrium, the full long-run effect of this fiscal policy will be to

• A) increase real Gross Domestic Product (GDP).
• B) increase the price level.
• C) increase either the real Gross Domestic Product (GDP) or the price level, depending on the length of the time lag.
• D) decrease both real Gross Domestic Product (GDP) and the price level.

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Definitions:

Cultural Considerations

Factors that recognize and respect the beliefs, languages, interpersonal styles, and behaviors of individuals shaped by their cultural background.

Acculturation and Enculturation

The processes through which individuals learn and adopt the cultural habits of another group (acculturation) and the cultural habits of their native group (enculturation), respectively.

Helper Bias

The tendency for individuals providing support or assistance to others to have preconceived notions or biases that can affect their judgment or behavior.

Process-oriented Goals

Objectives that focus on the steps, experiences, or methods required to achieve a specific outcome, emphasizing the journey rather than the end result.