In an Economy, the Government Wants to Increase Aggregate Demand

question 168

Multiple Choice

In an economy, the government wants to increase aggregate demand by $50 billion at each price level to increase real GDP and reduce unemployment.If the MPS is .4, then it could increase government spending by:

• A)$10 billion.
• B)$20 billion.
• C)$31.25 billion.
• D)$40.50 billion.

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Definitions:

Individualist Cultures

Cultures that emphasize personal independence and the self over group goals and cohesion.

Collectivist Cultures

Societies that prioritize the group over the individual, focusing on community, cooperation, and collective interests.

Aggressive Behavior

A pattern of actions or behaviors in which an individual may threaten or cause harm to another person or object.

Plutchik's Theory

A psychological theory that identifies eight primary emotions, which pair off into four sets of polar opposites, suggesting emotions drive human evolutionary adaptation.