(Figure: Saving, Investment, Government Spending, and Net Exports) in the Graph

question 266

Multiple Choice

(Figure: Saving, Investment, Government Spending, and Net Exports) In the graph above, if full employment income is $1,000 while the current equilibrium is $750 at point a, _____ gap exists, such that _____ in aggregate expenditures equal to _____ is needed to close the gap.

• A) an inflationary; a decrease; $100
• B) an inflationary; an increase; $250
• C) a recessionary; a decrease; $100
• D) a recessionary; an increase; $250

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Definitions:

Reinforcement Theory

A concept in behavioral psychology based on the idea that behavior can be shaped by controlling the consequences to those behaviors, emphasizing the use of reinforcement and punishment.

Behavioural Consequences

The outcomes or results that follow an individual's actions or behaviors, which can influence future behavior.

Profit-sharing

A company policy of distributing a portion of its profits to its employees as a form of bonus or incentive.

Incentive Compensation

A system of pay based on performance, aiming to motivate employees through rewards tied to achieving specific goals or benchmarks.