Exhibit 15-7 Aggregate Demand and Supply Model

question 50

Multiple Choice

Exhibit 15-7 Aggregate demand and supply model

-Suppose the economy in Exhibit 15-7 is in equilibrium at point E₁ and the marginal propensity to consume (MPC) is 0.75.Following Keynesian economics,to lower the price level from 170 to 150 the government should raise taxes by:

• A) $20 billion.
• B) $100 billion.
• C) $133 billion.
• D) $400 billion.

---

Definitions:

Older People

Individuals typically characterized by an advanced age, often defined legally or socially as people who are at or beyond the retirement age in their society.

Religious Services

Ceremonies or rituals conducted in honor or worship of a divine entity or entities, often held in dedicated spaces like churches, mosques, or temples.

Hinduism

A major world religion that originated on the Indian subcontinent, characterized by a belief in reincarnation, karma, a multitude of gods and goddesses, and a pursuit of dharma (righteous living).

Reincarnation

The belief that after death, the soul or spirit begins a new life in a new body, potentially that of a human, animal, or spiritual entity.