In the New Classical Model, a $100 Billion Increase in Government

question 54

Multiple Choice

In the new classical model, a $100 billion increase in government purchases financed by borrowing will

• A) increase the real interest rate, which will crowd out private spending.
• B) lead to a $100 billion increase in real GDP.
• C) lead to a $400 billion increase in real GDP if the marginal propensity to consume is three-fourths.
• D) leave the interest rate, aggregate demand, and real output unchanged.

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Definitions:

Number of Territories

The total count of distinct territorial areas occupied or controlled by individuals or groups, often in the context of animal behavior.

Ecological Constraints Hypothesis

The theory suggesting that the distribution and dynamics of animal populations are limited by environmental and ecological factors.

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A small bird species indigenous to the Seychelles Islands known for its interesting mating systems and conservation success story.

Helping Behavior

Acts performed by an individual that are intended to benefit another individual or individuals, often at a cost or risk to the helper.