When the Price Level Falls

question 40

Multiple Choice

When the price level falls

• A)The interest rate falls because people will want to hold more money and so sell bonds.
• B)Firms will want to spend more on new business buildings and business equipment and households will want to spend more building new homes.
• C)Both A and B are correct.
• D)None of the above are correct.

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Definitions:

Social Loafing

The phenomenon wherein individuals exert less effort to achieve a goal when they work in a group than when they work alone.

Group Polarization

A phenomenon where discussions within a group lead to the adoption of more extreme positions or attitudes than the members initially had.

Conformity

The act of matching attitudes, beliefs, and behaviors to group norms or expectations.

Social Loafing

The phenomenon where individuals exert less effort when working in a group compared to when working alone, due to perceived diffusion of responsibility.