Assume in a Private Economy That the Equilibrium Level of Income

question 195

Multiple Choice

Assume in a private economy that the equilibrium level of income is $380 and the MPS is 0.25.Now suppose government collects taxes of $50 and spends the entire amount.As a result:

• A)the equilibrium level of real income and the price level will both remain unchanged.
• B)nominal wage rates will fall.
• C)the equilibrium level of income will rise to $420.
• D)the equilibrium level of income will rise to $430.

---

Definitions:

Edema

Swelling caused by excess fluid trapped in the body's tissues, often affecting the extremities.

Immunological Memory

Immunological memory is the ability of the immune system to quickly and specifically recognize an antigen that the body has previously encountered, leading to an enhanced response upon subsequent exposures.

Cytokine

Small proteins released by cells that affect the behavior of other cells, significant in immune responses.

Tumor Necrosis Factor

A cell signaling protein (cytokine) involved in systemic inflammation, playing a role in the regulation of immune cells.