The Diagram Below Shows Desired Aggregate Expenditure for a Hypothetical

question 4

Multiple Choice

The diagram below shows desired aggregate expenditure for a hypothetical economy.Assume the following features of this economy: • marginal propensity to consume (mpc) = 0.75
• net tax rate (t) = 0.20
• no foreign trade
• fixed price level
• all expenditure and income figures are in billions of dollars. FIGURE 22-2
Refer to Figure 22-2.What is the level of autonomous consumption?

• A)$0
• B)$75
• C)$100
• D)$175
• E)$250

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Definitions:

Encoding Specificity

A principle stating that the recall of information is improved when the conditions during retrieval are similar to the conditions during encoding.

Retrieval Cues

Stimuli or prompts that help in the recall of information stored in memory.

Infant Amnesia

The phenomenon in which older children and adults are unable to recall memories from the first few years of life, theorized to be due to the development of the hippocampus and other memory-related brain structures.

Explicit Memory Tests

Assessments that measure the recall of specific information, requiring conscious effort to retrieve memories.