The Spending Allocation Model Is Designed to Explain

question 26

Multiple Choice

The spending allocation model is designed to explain

• A)short-run (monthly) movements in the economy.
• B)movements in the CPI.
• C)movements in the GDP deflator.
• D)long-run (a period of years) movements in the economy.
• E)why the production possibilities frontier is not a relevant concept in macroeconomics.

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Definitions:

Obligations

Duties or commitments that one is bound to carry out or fulfill.

Constraints

Limitations or restrictions that impact or regulate actions, processes, or developments.

Incompatible Biases

Prejudices or preconceived opinions that conflict with each other or with current situations.

Internal Attributions

The process of explaining someone's behavior based on internal characteristics such as personality, disposition, or attitude.