Exhibit 12-2 -In an Economy Characterized by the Aggregate Expenditure Line in Expenditure

question 217

Multiple Choice

Exhibit 12-2
-In an economy characterized by the aggregate expenditure line in Exhibit 12-2, how would a $100 decrease in autonomous net taxes impact real GDP?

• A)decrease real GDP by $200
• B)decrease real GDP by $100
• C)no impact on real GDP
• D)increase real GDP by $100
• E)increase real GDP by $200

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Definitions:

Government Spending

The total amount of money used by the government to pay for services, infrastructure, public projects, and other governmental functions.

Social Programs

Organized efforts by government, private organizations, or nonprofits to address and improve societal issues and welfare.

Lyndon B. Johnson

The 36th President of the United States, serving from 1963 to 1969, known for his domestic policies, including civil rights, public broadcasting, Medicare, and Medicaid.

Philanthropy

The desire to promote the welfare of others, often expressed through generous financial donations to cause-oriented organizations or efforts.