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Exhibit 16A-5 Macro AD\AS Models as Shown in Exhibit

question 3

Multiple Choice

Exhibit 16A-5 Macro AD\AS Models $Exhibit 16A-5 Macro AD\AS Models As shown in Exhibit 16A-5, assume the marginal propensity to consume MPC equals 0.75. Using discretionary fiscal policy, federal government spending should be ____ in order to restore the economy from E<sub>1 </sub>to full employment. A) increased by $.25 trillion B) decreased by $.25 trillion C) decreased by $2 trillion D) increased by $2 trillion E) increased by $1 trillion$ As shown in Exhibit 16A-5, assume the marginal propensity to consume MPC equals 0.75. Using discretionary fiscal policy, federal government spending should be ____ in order to restore the economy from E₁to full employment.

Definitions:

Paleontology

The scientific study of life that existed prior to, and sometimes including, the start of the Holocene Epoch (approximately 11,700 years ago). It involves the examination of fossils to understand the processes of evolution and the history of life on Earth.

Marine Animals

Organisms that inhabit the saltwater environments of oceans and seas.

Nicolaus Steno

A pioneering geologist and bishop in the 17th century, known for laying the foundational principles of stratigraphy, the study of rock layers and layering.

Stratigraphy

The study of layering in rock (stratification).