If Variable X Falls as a Result of Variable Y

question 12

Multiple Choice

If variable X falls as a result of variable Y falling,then X and Y are

• A) directly related.
• B) negatively related.
• C) inversely related.
• D) independent.

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Definitions:

Aggregate Demand

The total demand for all goods and services within an economy at various price levels, in a given time period.

Automatic Stabilizer

Economic policies and programs, such as unemployment benefits and taxation, that automatically adjust to counteract economic fluctuations without direct intervention by policymakers.

Crowding-out

A situation where increased public sector spending leads to a reduction in private sector spending.

Accelerator Effect

Refers to the phenomenon where an increase in national income results in a proportionally larger increase in investment spending due to expected higher demand for products.