(Figure: Aggregate Expenditures) the Figure Shows the Aggregate Expenditures Line

question 98

Multiple Choice

(Figure: Aggregate Expenditures) The figure shows the aggregate expenditures line for an economy. Which is the proper sequence of events if income was originally at $100?

• A) Total spending exceeds income, firms reduce production, workers are laid off, and incomes fall until equilibrium is reached.
• B) Total income exceeds spending, firms expand production, workers are hired, and incomes rise until equilibrium is reached.
• C) Total spending exceeds income, firms expand production, workers are hired, and incomes rise until equilibrium is reached.
• D) Total income exceeds spending, firms reduce production, workers are laid off, and incomes fall until equilibrium is reached.

---

Definitions:

Stereotype

A simplified and fixed image or idea of a particular type of person or thing, commonly held in a manner that dismisses individual differences.

Prejudice

A preconceived opinion or bias against a person, group, or topic that is not based on reason or actual experience.

Cognition

The process of obtaining knowledge and insight through mental effort, experiences, and sensory input.

Affect

A term used to describe the experience of feeling or emotion.