Suppose That Consumers Become More Pessimistic About the Future And

question 101

Multiple Choice

Suppose that consumers become more pessimistic about the future and, as a result, reduce their consumption by $10 billion. If the marginal propensity to consume is 0.80, how will this $10 billion reduction in consumption affect the equilibrium level of real GDP?

• A) Real GDP will decrease by $8 billion.
• B) Real GDP will decrease by $10 billion.
• C) Real GDP will decrease by $40 billion.
• D) Real GDP will decrease by $50 billion.

Understand the role of transference in therapeutic settings.

Comprehend methods for associating relaxation with anxiety-arousing situations.

Evaluate the effectiveness of psychotherapy and the influence of factors like the placebo effect.

Differentiate between cognitive therapy and cognitive-behavioral therapy.