In the Basic Keynesian Model,a $1 Billion Increase in Autonomous

question 196

Multiple Choice

In the basic Keynesian model,a $1 billion increase in autonomous consumption leads to ________ in short-run equilibrium output.

• A) a $1billion increase
• B) an increase of more than $1 billion
• C) no change
• D) a $1 billion decrease
• E) a decrease of more than $1 billion

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Definitions:

Developing Country

A nation with a lower living standard, underdeveloped industrial base, and low Human Development Index relative to other countries.

Capital Imports

The purchase and importation of foreign capital goods and services, reflecting a country's investment in assets that promote economic growth.

Foreign Aid

Financial or non-financial assistance given from one country to another, often to support development or alleviate poverty.

Purchasing Power

The real value of money in terms of the quantity of goods or services that one unit of money can buy.