The authors tested whether happy moods increase, and sad moods decrease, reliance on general knowledge structures. Participants in happy, neutral, or sad moods listened to a “going-out-for-dinner” story. Happy participants made more intrusion errors in recognition than did sad participants, with neutral mood participants falling in between (Experiments 1 and 2). Happy participants outperformed sad ones when they performed a secondary task while listening to the story (Experiment 2), but only when the amount of script-inconsistent information was small (Experiment 3). This pattern of findings indicates higher reliance on general knowledge structures under happy rather than sad moods. It is incompatible with the assumption that happy moods decrease either cognitive capacity or processing motivation in general, which would predict impaired secondary-task performance. (PsycINFO Database Record (c) 2007 APA, all rights reserved) (from the journal abstract)