Exhibit 11-2 Aggregate Demand and Supply Model

question 87

Multiple Choice

Exhibit 11-2 Aggregate demand and supply model

Suppose the economy in Exhibit 11-2 is in equilibrium at point E₁ and the marginal propensity to consume (MPC) is 0.75. Following Keynesian economics, the federal government can move the economy to full employment at point E₂ by:

• A) decreasing government tax revenue by approximately $33 billion.
• B) decreasing government tax revenue by $750 billion.
• C) increasing government tax revenue by $100 billion.
• D) increasing government tax revenue by approximately $33 billion.

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Definitions:

Spam

Unsolicited e-mail.

Unsolicited E-mail

Unrequested and often unwanted email, typically in the form of spam or junk mail, which can be a security risk or a nuisance.

Channel Conflict

The alienation of existing distributors when a company decides to sell to customers directly online.

Alienating Customers

Alienating customers refers to actions or policies by a business that drive customers away, often due to poor service, product dissatisfaction, or feeling undervalued.