Scenario 21-2

question 184

Multiple Choice

Scenario 21-2. The following facts apply to a small, imaginary economy.• Consumption spending is $5,200 when income is $8,000.• Consumption spending is $5,536 when income is $8,400.
-Refer to Scenario 21-2. In response to which of the following events could aggregate demand increase by $1,500?

• A)A stock-market boom increases households' wealth by $300, and there is an operative crowding-out effect.
• B)A stock-market boom increases households' wealth by $275, and there is an operative crowding-out effect.
• C)An economic boom overseas increases the demand for U.S. net exports by $240, and there is no crowding-out effect.
• D)Aggregate demand could increase by $1,500 in response to any of these events.

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Definitions:

Binocular Depth Perception

The ability to perceive the world in three dimensions (3D) and to judge the distance of objects, using visual cues derived from the two eyes working together.

Subjective Colour Mixing

The phenomenon of perceiving new colors when different wavelengths of light are combined in the eye, rather than physically mixed.

Ambiguous Figures

Visual images that can be perceived in more than one way, illustrating how perception can shift between multiple interpretations.

Visual Illusions

Perceptual anomalies where the observed images differ from the actual reality, often revealing how the human brain processes information.