Exhibit 20A-4 Macro AD/AS Model

question 14

Multiple Choice

Exhibit 20A-4 Macro AD/AS Model

-As shown in Exhibit 20A-4,assume the marginal propensity to consume MPC equals 0.80.Using discretionary fiscal policy,federal government spending should be ____ in order to restore the economy from E₁ to full employment.

• A) increased by $1.6 trillion
• B) decreased by $1.6 trillion.
• C) increased by $.20 trillion,
• D) increased by $.20 trillion
• E) increased by $.80 trillion

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Definitions:

Complex Sentence

is a type of sentence structure that consists of one independent clause and at least one dependent clause, connected by subordinating conjunctions, relative pronouns, or relative adverbs.

Proposition

A statement relating a subject and a claim about that subject.

Attitudes

Attitudes are psychological tendencies expressed by evaluating a particular entity with some degree of favor or disfavor, often influencing behavior or perceptions.

Simple Sentence

A sentence structure containing a single independent clause with a subject and a predicate.