Assume That the Marginal Propensity to Consume Is 0

question 158

Multiple Choice

Assume that the marginal propensity to consume is 0.8 and potential output is $800 billion. If GDP is $850 billion:

• A)there is an inflationary gap.
• B)there is a recessionary gap.
• C)the economy is in long-run equilibrium.
• D)taxes should be decreased.

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Definitions:

Opinions Over Time

How perspectives or beliefs of individuals or groups change across different periods.

Moscovici

Refers to Serge Moscovici, a social psychologist known for his work on social influence, minority influence, and the theory of social representations.

Minority Influence

A form of social influence where a smaller portion of a group changes the attitudes, beliefs, or behaviors of the larger group.

Conformity And Photocopying

The phenomenon where individuals adjust their actions or opinions to align with a perceived group norm, illustrated by studies observing behavior change in the context of a photocopying scenario.