Asked by Santiago alzate on Jul 07, 2024
Verified
Increased optimism about the future leads to rising prices and falling unemployment in the short run.
Future Optimism
A psychological state or economic theory that anticipates positive outcomes and growth in the future.
Rising Prices
Rising prices refer to the phenomenon where the general level of prices for goods and services in an economy increases over time, often indicative of inflationary pressures.
- Identify how perceptions and uncertainties related to the economy influence investment expenditure and overall demand.
- Understand the behavior of output and price levels when influenced by economic policies and external disturbances.
Verified Answer
CW
Camryn WilsonJul 08, 2024
Final Answer :
True
Explanation :
Increased optimism about the future can lead to higher consumer and business spending, which in turn boosts demand for goods and services. This increased demand can cause prices to rise (due to higher demand relative to supply) and unemployment to fall as businesses hire more workers to meet the increased demand.
Learning Objectives
- Identify how perceptions and uncertainties related to the economy influence investment expenditure and overall demand.
- Understand the behavior of output and price levels when influenced by economic policies and external disturbances.
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