An Economist Who Would Most Likely Use Active Policymaking Would

question 220

Multiple Choice

An economist who would most likely use active policymaking would support which of the following conclusions?

• A) Pure competition is not typical in most markets.
• B) Price flexibility is common in most markets.
• C) Demand shocks have little or no short-run effects on real Gross Domestic Product (GDP) and unemployment.
• D) Supply shocks explain most business cycles.

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Definitions:

Unconscious-Processing

Cognitive processing that occurs without conscious awareness, influencing perceptions and decisions without our explicit knowledge.

Problem-Space

The set of all possible states or configurations that can be reached in solving a problem or achieving a goal.

Mental Set

A predisposition to approach a problem in a particular way, often influenced by past experiences.

Functional Fixedness

A cognitive bias that limits a person to using an object only in the way it is traditionally used.