A Drop in Consumption or Investment Spending Caused by Increased

question 20

Multiple Choice

A drop in consumption or investment spending caused by increased government spending is referred to as:

• A)the multiplier effect.
• B)an expansionary gap.
• C)the Ricardian equivalence.
• D)the paradox of thrift.
• E)the crowding out.

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Definitions:

Cognitive Dissonance

The psychological discomfort experienced when holding two or more conflicting beliefs, ideas, or values.

Fundamental Attribution Error

A cognitive bias that causes people to overemphasize personal characteristics and ignore situational factors in judging others' behavior.

Situational Attribution

The process of attributing a person's behavior to external or situational factors.

Dispositional Attribution

A psychological concept suggesting that individuals attribute behavior to innate qualities of the person performing the action.