If the Government Decides to Spend an Extra $4 Billion

question 47

Multiple Choice

If the government decides to spend an extra $4 billion on fighter jets that they would otherwise have spent on computers, and the MPC = 0.75, what is the effect on AD?

• A)​AD increases by $20 billion.
• B)​AD increases by $16 billion.
• C)​AD increases by $4 billion.
• D)​AD does not change.

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Definitions:

Beliefs

Convictions or acceptances that something exists or is true, especially without proof.

Feelings

Emotional states or reactions that are subjectively experienced, often as responses to stimuli or situations, and can influence behavior and thoughts.

Behavior Tendencies

Predominant patterns or inclinations in an individual's actions or reactions under specific circumstances.

Task-oriented Management

A management style focused on completing tasks and achieving specific goals within a set timeframe, often involving structured planning and execution procedures.