The Diagram Below Shows Alternate Paths for Two Hypothetical Economies,each

question 99

Multiple Choice

The diagram below shows alternate paths for two hypothetical economies,each starting with GDP of $1 billion.Assume that Area 1 is equal to Area 2. FIGURE 25-1 Refer to Figure 25-1.Suppose Economy A jumps to the path of Economy B at Year 0 by increasing the share of GDP that is saved.In that case,which of the following statements about Economy A is true?

• A)Economy A will not be able to regain the losses in consumption it incurs by jumping to the path of Economy B.
• B)By Year Y,the increase in consumption made possible by the economy's higher growth rate approximately equals the consumption sacrificed in earlier years.
• C)By Year X,Economy A is better off in terms of material living standards for having jumped to the path of Economy B.
• D)By jumping to a new growth path at Year 0,Economy A has increased the share of national income that is consumed.
• E)By Year X,Economy A is saving and investing the same share of its national income as it would have been had it stayed on its original path.

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Definitions:

Ingroup

A group to which an individual identifies as being a member, often viewed in contrast to an "outgroup".

Self-Focus

The act of directing attention inward, towards one's own thoughts, feelings, and experiences, which can influence self-awareness and personal growth.

Form Impressions

The process of forming opinions or beliefs about others based on the initial information presented to us.

Accurate Impression

The correct or truthful understanding or representation of something or someone's character, appearance, or behavior.