Refer to the Diagram Given Below

question 200

Multiple Choice

Refer to the diagram given below. In the above diagram I_g is gross investment, X is exports, G is government purchases, S and S_a are saving before and after taxes, respectively.M is imports, and T is net taxes, which is taxes less transfers.The effect of the public budget is to:

• A)lower the equilibrium level of GDP from Y₄ to Y₂.
• B)raise the equilibrium level of GDP from Y₂ to Y₄.
• C)lower the equilibrium level of GDP from Y₄ to Y₃.
• D)raise the equilibrium level of GDP from Y₂ to Y₃.

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Definitions:

Equilibration

The process in cognitive development described by Piaget where children balance assimilation and accommodation to create stable understanding.

Disequilibrium

Disequilibrium refers to a state of imbalance or lack of equilibrium, often used in contexts ranging from physical stability to economic conditions.

Accommodation

In cognitive development, the process of altering one's existing schemas or ways of thinking in response to new information.

Equilibration

A concept in Piaget’s cognitive development theory referring to the process of achieving mental stability where the child's internal structures match or fit the external environment.