If Government Expenditure Increases by $200 Billion and Taxes Simultaneously

question 21

Multiple Choice

If government expenditure increases by $200 billion and taxes simultaneously increase by $200 billion, then aggregate demand

• A) increases only if aggregate supply increases.
• B) increases no matter what happens to aggregate supply.
• C) remains the same.
• D) increases only if aggregate supply decreases.
• E) decreases no matter what happens to aggregate supply.

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Definitions:

Operant Conditioning

A method of learning that employs rewards and punishments for behavior, encouraging the subject to associate certain behaviors with specific consequences.

Random Ratio

A reinforcement schedule in operant conditioning where a response is reinforced after an unpredictable number of responses.

Negative Reinforcement

A behavioral psychology concept involving the removal of an unpleasant stimulus to increase the likelihood of a desired response.

Conditioned Stimulus

A previously neutral stimulus that, after becoming associated with an unconditioned stimulus, eventually comes to trigger a conditioned response.