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Pessimism Suppose the Economy Is in Long-Run Equilibrium. Then Because of of Corporate

question 102

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Pessimism
Suppose the economy is in long-run equilibrium. Then because of corporate scandal, international tensions, and loss of confidence in policymakers, people become pessimistic regarding the future and retain that level of pessimism for some time.


-Refer to Pessimism.In the long run,the change in price expectations created by pessimism shifts


Definitions:

Procure Proceeds

The act of obtaining money or benefits as a result of conducting some activity, often related to business transactions.

Principal Revokes

The act of a principal canceling or withdrawing the authority previously granted to an agent, effectively terminating the agent's ability to act on behalf of the principal.

Obligation Tenders

Offers made to fulfill a duty or promise, particularly in a legal or financial context, such as repaying a debt.

Agency Termination

The process by which the relationship between an agent and their principal is ended.

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