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.

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Definitions:

Majority Culture

pertains to the cultural practices, values, and norms that are widely accepted and practiced by the dominant group in a society.

Altruism

The selfless concern for the well-being of others, often leading to acts of kindness without expectation of reward.

Helping Behavior

is actions intended to aid or benefit another person or group without expectation of reward for the self.

Voluntarily

Done, made, or provided out of free will, without coercion or obligation.