The Figure Given Below Represents the Macroeconomic Equilibrium in the Aggregate

question 122

Multiple Choice

The figure given below represents the macroeconomic equilibrium in the aggregate income and aggregate expenditure framework. Assume that MPI is equal to zero.
Figure 10.4
In the figure:
C: Consumption
I₁ and I₂: Investment
G: Government Spending
X: Exports
-Refer to Figure 10.4. The spending multiplier is _____.

• A) 2
• B) 3
• C) 6
• D) 0.5
• E) 1.2

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Definitions:

Optimistic Explanatory Style

A tendency to attribute positive events to stable and global causes and negative events to transient and specific causes.

Health Problems

Issues affecting the body or mind that influence overall well-being and functioning.

Actions

Any acts or deeds taken by an individual, which can be observed externally and may be driven by intention, motivation, or external influence.

Seligman

A psychologist best known for his work on learned helplessness, positive psychology, and well-being.