FIGURE 21-3 -Refer to Figure 21-3. Assuming AE0 Is the Prevailing Aggregate

question 87

Multiple Choice

FIGURE 21-3
-Refer to Figure 21-3. Assuming AE0 is the prevailing aggregate expenditure function, at a level of national income equal to Y3 we can state that

• A) consumption is greater than desired aggregate expenditure.
• B) consumption is less than desired aggregate expenditure.
• C) desired aggregate expenditure is greater than output.
• D) desired aggregate expenditure is less than output.
• E) desired saving is less than zero.

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Definitions:

Unconditioned Response

A natural, automatic reaction to a stimulus that occurs without prior conditioning or learning.

Pavlov

A Russian physiologist known for his work on classical conditioning, demonstrating the concept of the conditioned reflex.

Classical Conditioning

An educational method where two signals are consistently associated together, leading to a reaction initially triggered by the second signal but ultimately provoked by just the first signal.

Proximate Causes

Immediate, underlying factors within an organism that explain "how" biological processes occur.