The figure given below depicts macroeconomic equilibrium in a closed economy. Assume that the spending multiplier in this economy is 1.5.
Figure 10.5
-Refer to Figure 10.5. If the target or potential level of real GDP is $1,200, then at an equilibrium real GDP level of $900:
Definitions:
Negative Reinforcement
A behavioral principle where the removal of an unpleasant stimulus following a desired behavior increases the likelihood of the behavior occurring again.
Positive Reinforcement
A method of strengthening desired behaviors by presenting a desirable stimulus after the behavior occurs.
Probability
A measure or estimation of how likely it is that an event will occur, expressed as a number between 0 and 1, where 1 denotes certainty.
Avoidance Learning
A learning process by which an individual learns a behavior or response to avoid an unpleasant stimulus or situation.
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