(Table: Keynesian Equilibrium Analysis with Taxes and Net Exports) Given

question 55

Multiple Choice

(Table: Keynesian Equilibrium Analysis with Taxes and Net Exports) Given the data in the table, if full employment income is $500 while the current equilibrium is $750, a(n) _____ gap exists, such that a(n) _____ in spending equal to _____ is needed to close the gap.

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

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Definitions:

Perceptual Distortion

A cognitive bias that affects the way individuals perceive reality, often leading to misinterpretations or inaccurate judgments.

Projecting

Projecting involves transferring one's own feelings, thoughts, or attributes onto another person or group, often unconsciously.

Selective Attention

The process of focusing on a specific aspect of information while simultaneously ignoring other irrelevant information.

Perceptual Distortion

A cognitive bias that affects the way we perceive reality, often leading to misinterpretations or inaccuracies in judgments.