Scenario 24-2

question 156

Multiple Choice

Scenario 24-2.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 24-2.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:

Acknowledgment

The act of recognizing or admitting the existence or truth of something, often used in the context of giving credit to someone's contribution.

Operating Foundation

A type of foundation that uses its resources to conduct research, social welfare activities, or other programs directly.

Corporate Foundation

A private foundation created and funded by a corporation to support charitable activities and programs aligned with the company’s social responsibility goals.

Bequests

The act of giving assets, such as money, property, or personal belongings, to others through a will.