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Exhibit 20A-4 Macro AD/AS Model

question 10

Multiple Choice

Exhibit 20A-4 Macro AD/AS Model
Exhibit 20A-4 Macro AD/AS Model    -As shown in Exhibit 20A-4,assume the marginal propensity to consume MPC equals 0.75.Using discretionary fiscal policy,federal government spending should be ____ in order to restore the economy from E₁ to full employment. A)  increased by $.25 trillion B)  decreased by $.25 trillion C)  decreased by $2 trillion D)  increased by $2 trillion E)  increased by $1 trillion
-As shown in Exhibit 20A-4,assume the marginal propensity to consume MPC equals 0.75.Using discretionary fiscal policy,federal government spending should be ____ in order to restore the economy from E₁ to full employment.

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Definitions:

Fundamental Attribution Error

The tendency to overestimate the effect of disposition or personality and underestimate the effect of the situation when explaining the behaviors of others.

White Americans

Individuals residing in the United States who identify as being of European, Middle Eastern, or North African descent.

Black Americans

A term referring to the African American population or individuals of Black African descent living in the United States.

Causal Attributions

The method through which people deduce the reasons behind their own and others' actions.

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