An Increase in the Sensitivity of Private Spending (Consumption,investment,and Net

question 160

Multiple Choice

An increase in the sensitivity of private spending (consumption,investment,and net exports) to changes in the interest rate ________ the government purchases multiplier.

• A)will decrease
• B)will increase
• C)will not change
• D)may increase or may decrease

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Definitions:

Frontal Cortex

The front part of the cortex of the brain. Divided left and right into the two frontal lobes, this part of the brain is associated with cognitive functioning such as planning, foresight, and understanding.

Substantia Nigra

A brain area critical to movement and reward; loss of neurons here is associated with Parkinson's disease.

Amygdala

A brain region involved in processing emotions, including fear, pleasure, and anger, crucial for emotional learning and memory.