Use the Aggregate Expenditures Model and Assume an Economy Is

question 152

Multiple Choice

Use the aggregate expenditures model and assume an economy is in equilibrium at $5 trillion which is $250 billion below full-employment GDP. If the marginal propensity to consume (MPC) is 0.60, full-employment GDP can be reached if government spending:

• A)decreases by $60 billion.
• B)decreases by $100 billion.
• C)decreases by $250 billion.
• D)is held constant.

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Definitions:

Perceived Benefits

The advantages or positive outcomes that individuals believe they will gain from a specific action, behavior, or decision.

Nutritional Superiority

The quality of certain foods being more nutritious or beneficial to health compared to others.

Health Belief Model

A psychological model that explains and predicts health behaviors by focusing on the attitudes and beliefs of individuals.

Nondirective

An approach in therapy and counseling where the therapist provides support without leading the client towards specific solutions, empowering them to make their own decisions.