In Case of Classical Model, Increase in Aggregate Expenditure Would

question 73

Multiple Choice

In case of classical model, increase in aggregate expenditure would:

• A)shift the aggregate demand curve upward leading to increase in real GDP and prices.
• B)shift the aggregate demand curve downward leading to increase in real GDP and prices.
• C)shift the aggregate demand curve upward leading to decrease in real GDP and prices.
• D)shift the aggregate demand curve downward leading to decrease in real GDP and prices.
• E)shift the aggregate demand curve upward leading to increase in prices and no change in real GDP.

Explain the significance of von Neumann-Morgenstern utility functions in the context of risky choices.

Calculate the expected value of a gamble and compare it with certain outcomes to make rational choices.

Analyze insurance decisions and the willingness to pay for risk mitigation.

Understand how utility functions can represent preferences towards risk and how they influence gambling decisions.

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Definitions:

Psychodrama

A therapeutic technique in which people enact scenes from their lives, dreams, or imaginations under the guidance of a therapist, to gain insight and resolve problems.

Freud's Psychodynamic Analysis

A theoretical approach in psychology that emphasizes unconscious processes and conflicts as the root of psychological issues and behavior.

Psychoeducational Group

A form of group therapy that combines educational and psychological support to help participants deal with specific issues or learn certain skills.

Interpersonal Skills

Abilities that facilitate effective and positive communication and interaction with others, including listening, empathy, and conflict resolution.