Refer to the Above Information

question 143

Multiple Choice

Refer to the above information.In this economy a 3 percentage point decrease in the interest rate will:

• A)increase equilibrium GDP by $200.
• B)increase equilibrium GDP by $100.
• C)increase equilibrium GDP by $50.
• D)decrease equilibrium GDP by $50.

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Definitions:

Practical Rationality

Decision-making processes and actions that are oriented toward achieving specific, practical outcomes rather than adhering to theoretical or ideological principles.

Theoretical Rationality

The capacity to apply reason and logic in constructing theoretical frameworks, often contrasting with practical reasoning used in everyday decision-making.

Substantive Rationality

A way of acting that takes into account the wider value or purpose of an action, rather than merely following a set of rules.

Formal Rationality

Formal rationality denotes a mode of thought and action guided by rules, laws, and procedures often associated with bureaucratic organizations and procedures.