The Next Questions Refer to the Following Simple Keynesian Model

question 39

Multiple Choice

The next questions refer to the following simple Keynesian model.
Suppose C = 1000 + .9Y, G = 400, I = 100, (X - IM) = 0, and there are no income taxes.
-If investment falls by 50,equilibrium GDP will

• A) fall by 50
• B) fall by 5
• C) fall by 500
• D) fall by 45
• E) fall by half its previous value

Calculate the mode for a given set of data.

Calculate the median for a given set of data.

Apply statistical concepts to interpret frequency distribution tables.

Develop skills in summarizing data sets using statistical measures.

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Definitions:

Noncompensatory Modeling

A decision-making process where options are evaluated based on whether they meet predetermined criteria, without considering trade-offs between characteristics.

Insight

A sudden understanding or realization of a problem's solution, often coming unexpectedly after a period of contemplation or seeming like a spontaneous revelation.

Mental Set

A psychological tendency or mindset to approach problems in a specific way due to past experiences or habits.

Compensatory Model

An approach in decision making that considers alternatives and compensates for less desirable aspects of options by considering the strengths of other aspects.