Suppose, for a Certain Economy, Real and Potential GDP Are

question 173

Multiple Choice

Suppose, for a certain economy, real and potential GDP are initially equal. Then government purchases permanently increase. Compared to the baseline, we would expect to see, in the long run,

• A)an increase in consumption, a decrease in net exports, and no change in investment.
• B)no change in consumption, investment, or net exports.
• C)no change in consumption and a decrease in both net exports and investment.
• D)a decrease in the sum of consumption, investment, and net exports.
• E)an increase in consumption, a decrease in investment, and a decrease in net exports.

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Definitions:

Sigmund Freud

An Austrian neurologist who founded psychoanalysis, a method for treating psychopathology through dialogue between a patient and a psychoanalyst.

Client-centred Therapy

A humanistic psychotherapy approach founded by Carl Rogers, emphasizing an individual's ability to self-heal and self-realize in a supportive, non-judgmental environment.

Systematic Desensitization

A therapeutic technique used to help individuals overcome phobias and anxiety disorders through gradual exposure to the feared object or situation.

Rational-emotive Therapy

A form of psychotherapy that identifies irrational beliefs, challenges these beliefs, and encourages the adoption of healthier, rational alternatives.