In the Keynesian Model, to Understand the Determination of Income

question 45

Multiple Choice

In the Keynesian model, to understand the determination of income and employment it is necessary to understand

• A) how aggregate supply is determined.
• B) how aggregate demand is determined.
• C) how long-run aggregate supply is determined.
• D) how interest rates are determined.

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Definitions:

Neutral Stimulus

A stimulus that initially produces no specific response other than focusing attention, until it is associated with an unconditioned stimulus.

Organism's Responding

The manner in which an organism reacts to stimuli or changes in its environment.

Conditioned Response

A learned reaction to a previously neutral stimulus that occurs as a result of conditioning, typically demonstrated in Pavlov’s dog experiment.

Unconditioned Response

A spontaneous, innate response to a trigger that happens without any previous training or conditioning.