In a Certain Economy, the Components of Aggregate Spending Are

question 109

Multiple Choice

In a certain economy, the components of aggregate spending are given by: C = 500 + 0.75(Y - T) - 500r
I = 300 - 500r
G = 400
NX = 30
T = 40
Given the information about the economy above, which expression below gives autonomous expenditures?

• A) [1,270 - 1,000r] + 0.75Y
• B) [1,200 - 1,000r]
• C) [1,230 - 1,000r]
• D) [1,200 - 1,000r] + 0.75Y

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Definitions:

Confirmation Bias

The tendency to search for, interpret, favor, and recall information in a way that confirms one’s preexisting beliefs or hypotheses.

Representativeness Heuristic

A cognitive shortcut used in decision making, where an individual relies on the similarity between the item in question and a category prototype.

Divergent Thinking

Expanding the number of possible problem solutions; creative thinking that diverges in different directions.

Fixation

(1) in thinking, the inability to see a problem from a new perspective; an obstacle to problemsolving. (2) in personality theory, according to Freud, a lingering focus of pleasure-seeking the developing human organism from about 2 weeks after fertilization through the secondmonth