Figure: Aggregate Demand and Fiscal Policy Refer to the Figure.Assume

question 151

Multiple Choice

Figure: Aggregate Demand and Fiscal Policy Refer to the figure.Assume the government of an economy in recession at point Y in the diagram is aware of the expenditure multiplier when it formulates policy decisions.If it chooses to increase government spending growth by 4percentage points,it should expect the economy to:

• A) move at least to point W.
• B) move at least to point X.
• C) move at least to point Z.
• D) stay at point Y.

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Definitions:

Depolarization

A reduction of the difference in charge between the inside and outside of the cell membrane, typically in a neuron, leading to the generation of an action potential.

Selectively Permeable

Describes biological membranes that allow certain substances to pass through while blocking others, thereby controlling the exchange of materials.

Resting Potential

The electrical potential of a neuron when not transmitting a signal, serving as the foundation for nerve impulse generation.

Ion

An atom or molecule that has lost or gained one or more electrons, giving it a positive or negative electrical charge.