Suppose the Economy Is Operating at Its Full-Employment-Noninflationary GDP and the MPC

question 191

Multiple Choice

Suppose the economy is operating at its full-employment-noninflationary GDP and the MPC is 0.75.The federal government now finds that it must increase spending on military goods by $21 billion in response to a deterioration in the international political situation.To sustain full-employment-noninflationary GDP government must:

• A)reduce taxes by $28 billion.
• B)reduce transfer payments by $21 billion.
• C)increase taxes by $21 billion.
• D)increase taxes by $28 billion.

Recognize the use and importance of proxy variables in research studies.

Understand the limits of correlation in establishing causation.

Analyze factors contributing to the failure or success in academic or research settings.

Recognize the importance of population selection and how it impacts study validity.

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Definitions:

Balance Theory

A psychological theory suggesting how people develop their relationships with others and objects in their environment based on cognitive consistency among triads of elements.

Unit Relation

The interconnectedness or interaction between different components or elements within a system.

Sentiment Relation

The association and connection between feelings or attitudes and how they influence behaviors or perceptions.

Multi-Attribute Models

Psychological models used to understand and predict consumers' attitudes and behaviors by analyzing multiple dimensions or attributes of a product or service.