In a Closed Economy,if the Government Is Already Running a Budget

question 60

Multiple Choice

In a closed economy,if the government is already running a budget deficit and then decides to increase spending by $50 billion without raising taxes,one can expect

• A) investment spending to fall by $50 billion.
• B) consumption to fall by $50 billion.
• C) saving to rise by $50 billion.
• D) consumption and investment to collectively fall by $50 billion.
• E) gross domestic product (GDP)to increase by $50 billion.

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Definitions:

Reciprocal Model

A theory or method where two or more elements influence each other in a mutual or cyclical manner.

Social Learning Model

A theory that suggests people learn from one another through observation, imitation, and modeling, emphasizing the importance of cognitive processes in learning.

Field Theory

An analytical framework in sociology and social psychology that examines social fields, or environments, and their influence on individual behavior and social dynamics, offering an alternative perspective to the psychological interpretation.

Social Learning Theory

A theory that posits individuals learn behaviors through observing others, imitating their actions, and understanding the consequences of those actions.