Suppose the Government Expenditure Increases by $200 and the Simple

question 132

Multiple Choice

Suppose the government expenditure increases by $200 and the simple spending multiplier equals 5.The final increase in output will be:

• A)$6000.
• B)$500.
• C)$200.
• D)more than $200.
• E)less than $200.

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Definitions:

Central Route

A pathway of persuasion that involves thoughtful consideration of the arguments presented, leading to lasting attitude change.

Cognitive Dissonance

A psychological phenomenon involving conflicting attitudes, beliefs, or behaviors that cause mental discomfort leading to an alteration in one of the attitudes, beliefs, or behaviors to reduce the discomfort.

Self-Perception Theory

A theory suggesting that individuals develop their attitudes and feelings by observing their own behavior and concluding what attitudes must have caused them.

Observational Learning

The process of acquiring knowledge, behaviors, or skills by watching and imitating others rather than through direct experience.