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

question 106

Multiple Choice

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 Optimism.How is the new long-run equilibrium different from the original one?

• A)both price and real GDP are higher
• B)both price and real GDP are lower.
• C)the price level is the same and GDP is higher.
• D)the price level is higher and real GDP is the same.

---

Definitions:

Group Assignments

Educational tasks or projects undertaken by a group of students intended to foster teamwork and collaborative learning.

Internalization

The process by which individuals take in and accept the norms, values, and beliefs of their society as their own.

Social Influence

The effect that the words, actions, or mere presence of other people have on our thoughts, feelings, attitudes, or behaviors.

Peer Pressure

The influence exerted by a peer group, encouraging individuals to change their attitudes, values, or behaviors to conform to group norms.