Refer to the Diagram for a Private Closed Economy

question 3

Multiple Choice

Refer to the diagram for a private closed economy. In this economy, aggregate expenditures

• A) do not change as GDP increases.
• B) increase by $2 for every $5 increase in GDP.
• C) increase by $2 for every $4 increase in GDP.
• D) increase by $2 for every $3 increase in GDP.

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Definitions:

Ordinary Care

The reasonable level of care, diligence, and judgment that a person in a particular profession is expected to exercise under specific circumstances.

Internal-Unstable

Attributes in attributing causation for an event or behavior to factors inside a person that can change, such as effort or mood.

External-Stable

An attributional pattern where success or failure is attributed to enduring factors outside an individual's control.

Cognitive Inconsistency

The state of having contradictory thoughts, beliefs, or attitudes, especially relating to behavioral decisions and attitude change.