Which of the Following Statements Is Incorrect

question 169

Multiple Choice

Which of the following statements is incorrect?

• A)Given the economy's MPS, a $15 billion reduction in government spending will reduce the equilibrium GDP by more than would a $15 billion increase in taxes.
• B)Other things unchanged, a tax reduction of $10 billion will increase the equilibrium GDP by $25 billion when the MPS is 0.4.
• C)If the MPC is 0.8 and GDP has declined by $40 billion, this was caused by a decline in aggregate expenditures of $8 billion.
• D)A government surplus is anti-inflationary; a government deficit is expansionary.

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Definitions:

Reinforcement

A process in psychology and behavior analysis that strengthens a behavior or response due to the application of a stimulus (reward or punishment) after the behavior occurs.

Unpleasant Consequence

An undesirable result or effect that follows a particular action or decision.

Law of Immediate Reinforcement

A principle stating that behaviors are more likely to be repeated when they are immediately followed by a positive reinforcement.

Desirable Behaviour

Actions or reactions that are preferred or encouraged within a specific context due to their positive outcomes or alignment with set norms.