Scenario 10.1 Imagine an Economy That Does Not Have International Trade and Trade

question 39

Multiple Choice

Scenario 10.1
Imagine an economy that does not have international trade and is initially in equilibrium. Later the government increases the level of spending by $350 million because it received a gift from abroad. In this economy, only 65 cents of every dollar is spent, and the rest is saved.
-Refer to Scenario 10.1. The new equilibrium level of GDP for the economy will be higher by approximately:

• A) $1 billion.
• B) $350 million.
• C) $65 million.
• D) $227.5 million.

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Definitions:

Colour Vision

The ability of the visual system to distinguish objects based on the wavelengths (or frequencies) of the light they reflect, emit, or transmit.

Perceptual Set

A psychological predisposition or readiness to perceive certain aspects of available sensory data and ignore others, influenced by expectations, experiences, and context.

Sensory Readiness

The state or condition in which sensory systems are primed to detect and process stimuli.

Cognitive Interpretation

The process by which individuals perceive, process, and give meaning to information from their environment, influencing their thoughts, feelings, and actions.