At Equilibrium, If Spending Increases by $1,200 and the Corresponding

question 220

Multiple Choice

At equilibrium, if spending increases by $1,200 and the corresponding increase in income is $1,500, what is the multiplier?

• A) 0.2
• B) 0.8
• C) 1
• D) 5

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Definitions:

Regression

A defense mechanism leading an individual to revert back to a previous stage of development in their behavior, thoughts, or feelings.

Unconsciously

Actions or thoughts that occur without conscious awareness or control, often stemming from the subconscious mind.

Oral Stage

The first stage in Freudian psychosexual development, occurring in the first year of life, where pleasure is centered around oral activities such as sucking and biting, playing a crucial role in the development of future relationships and behavior patterns.

Fixation

An obsessive focus or attachment to an individual, concept, or phase of development, potentially leading to psychological conflicts.