If Policy Makers Want to Increase Real GDP by $100

question 259

True/False

If policy makers want to increase real GDP by $100 billion and the marginal propensity to consume is 0.75, they should increase government purchases of goods and services by $75 billion.

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Definitions:

Learning Theory Approach

An educational methodology focusing on the understanding and application of how people learn, emphasizing behavior, cognition, and motivation.

Reinforcement and Conditioning

A process in behavioral psychology where behavior is strengthened or conditioned through reinforcement, which can be positive or negative.

Nativist Approach

A theory in psychology that suggests certain skills or abilities are "native" or hard-wired into the brain at birth.

Universal Grammar

A theory in linguistics that suggests the ability to acquire language is innate to humans and that all human languages share a common underlying structure.