If Government Spending Rises but the Central Bank Changes the Money

question 48

Multiple Choice

If government spending rises but the central bank changes the money supply to prevent income from changing,then

• A)both consumption and investment will remain unchanged.
• B)consumption rises and investment falls.
• C)investment falls but consumption rises.
• D)both consumption and investment rises.

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Definitions:

Systematic Desensitization

A behavior therapy technique aimed at reducing phobic or anxiety responses through gradual exposure to the feared object or situation paired with relaxation exercises.

Relaxation Response

A physical state of deep rest that is the opposite of the stress response, which can be induced through practices like meditation, deep breathing, or yoga.

Feared Stimulus

An object, situation, or event that triggers a strong fear response in an individual, often leading to avoidant behavior.

Contingency Management

A behavior modification technique that reinforces desirable behaviors with rewards and sometimes punishes undesirable behaviors to promote behavior change.