In the Short Run, When Government Purchases Fall, Income and Hence

question 40

Multiple Choice

In the short run, when government purchases fall, income and hence consumption fall, so

• A)real GDP falls by more than the fall in government purchases.
• B)both real GDP and potential GDP fall by the same amount as the fall in government purchases.
• C)real GDP falls by the same amount as the fall in government purchases.
• D)real GDP falls by less than the fall in government purchases.
• E)both real GDP and potential GDP fall by more than the fall in government purchases.

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Definitions:

Mathematical Computation

The process of performing mathematical operations to solve problems or derive new information.

Discrimination

Unjust treatment or consideration of different categories of people, especially based on race, age, or sex.

Facial Recognition

The cognitive ability to identify and distinguish between individual faces, typically using visual cues and patterns.

Right-Brained

Refers to a theory in which the right hemisphere of the brain is more responsible for creative, intuitive, and holistic thought processes.