Using the Keynesian Cross, If Autonomous Consumption Is $300 and Investment

question 42

Multiple Choice

Using the Keynesian cross, if autonomous consumption is $300 and investment is $200, and the marginal propensity to consume is 0.9, while government spending, net exports and taxes are zero, then equilibrium output is

• A) $450.
• B) $500.
• C) $950.
• D) $5,000.

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Definitions:

Negative Reinforcement

A behavioral principle where the removal of a negative condition strengthens a desired behavior.

Desirable Stimulus

A stimulus that elicits a positive response due to its appealing nature.

Negative Reinforcement

A behavioral principle where the removal of an unpleasant stimulus strengthens a desired behavior.

Punishment

A process where an undesired behavior is followed by a consequence, typically reducing the likelihood of that behavior occurring again.