Suppose That the Slope of the AE Curve Is 0

question 346

Multiple Choice

Suppose that the slope of the AE curve is 0.80. Then an increase of investment of $10 billion leads to an increase in equilibrium real GDP equal to

• A) $8.0 billion.
• B) $10.0 billion.
• C) $12.5 billion.
• D) $50.0 billion.

---

Definitions:

Contiguity

A principle in psychology and learning theory that suggests that events experienced close together in time or space are likely to be associated with each other.

Contrapreparedness

An inability to associate a specific conditioned stimulus (CS) and a specific unconditioned stimulus (UCS) despite repeated conditioning experiences

Predictable Stimulus

A stimulus that occurs in a manner or pattern that can be anticipated, allowing organisms to anticipate and react accordingly.

Stimulus Substitution

A theory in classical conditioning suggesting that the conditioned stimulus acts as a substitute for the unconditioned stimulus, eliciting the same response.