If a $100 Billion Decrease in Investment Spending Causes Income

question 163

Multiple Choice

If a $100 billion decrease in investment spending causes income to decline by $100 billion in the first round of the multiplier process and by $75 billion in the second round, income will eventually decline by:

• A)$400 billion.
• B)$300 billion.
• C)$200 billion.
• D)$500 billion.

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Definitions:

Classical Conditioning

A learning process that occurs through associations between an environmental stimulus and a naturally occurring stimulus, famously demonstrated by Ivan Pavlov's experiments with dogs.

Operant Conditioning

A method of learning where the intensity of an action is altered by either rewards or penalties.

White Rat

Often used in laboratory experiments, these are albino rats specifically bred for research purposes.

Rosalie Rayner

An American psychologist known for her work with John B. Watson on the Little Albert experiment, demonstrating classical conditioning in humans.