If the Price Level Is Constant and the Slope of the AE

question 291

Multiple Choice

If the price level is constant and the slope of the AE curve is 0.75, a decrease in government expenditures of $100 leads to a decrease in real GDP of

• A) $25.
• B) $100.
• C) $400.
• D) $800.

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Definitions:

Groupthink

The tendency among individuals in a group to prioritize agreement over critical thinking, leading to results in decision-making that are flawed or unwise.

Risky Shift

The phenomenon where a group collectively agrees on a course of action that is more extreme than they would have made individually.

Groupthink

In team environments, a pattern where the drive for cohesive thinking or obedience culminates in choices that are misguided or harmful.

Critical Evaluation

Involves systematically assessing the merits and faults of a theory, process, or piece of work, considering all relevant factors to form a logical judgment.