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:

On Call Basis

A work arrangement where individuals are not on regular schedule but available to work or respond to emergencies at any time when called upon.

General Anesthesia

A medically induced coma with loss of protective reflexes, used to perform surgeries without patient pain or awareness.

Conscious Sedation

Conscious sedation is a medical procedure that uses medication to help patients relax and minimize pain during a medical test or procedure, while remaining awake and able to respond.

Local Anesthesia

A technique used to numb a specific area of the body, preventing pain during surgical procedures or medical treatments.