The Figure Given Below Represents the Macroeconomic Equilibrium in the Aggregate

question 131

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. If autonomous government expenditures increase by $250 billion, equilibrium real GDP will:

• A) rise by $250 billion.
• B) fall by 300 billion
• C) rise by $500 billion.
• D) rise by $75 billion.
• E) rise by $100 billion.

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Definitions:

Chunking

A memory strategy that involves organizing information into manageable units or chunks.

Short-Term Memory

The capability to maintain a small volume of information in a condition of ready availability for a short time.

Short-Term Memory

The capacity for holding a small amount of information in an active, readily available state for a short period of time.

Magic Number

A term often used to refer to the number 7±2, which psychology suggests is the span of working memory, or the maximum number of items an individual can maintain in cognizant thought at once.