Scenario 16-2

question 258

Multiple Choice

Scenario 16-2. The following facts apply to a small, imaginary economy.
• Consumption spending is $5,200 when income is $8,000.
• Consumption spending is $5,536 when income is $8,400.
-Refer to Scenario 16-2. In response to which of the following events could aggregate demand increase by $1,500?

• A) A stock-market boom increases households' wealth by $300, and there is an operative crowding-out effect.
• B) A stock-market boom increases households' wealth by $275, and there is an operative crowding-out effect.
• C) An economic boom overseas increases the demand for U.S. net exports by $240, and there is no crowding-out effect.
• D) Aggregate demand could increase by $1,500 in response to any of these events.

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Definitions:

Package Carrier Delivery

A specialized service provided by companies for shipping parcels and packages directly to recipients or specific destinations.

Endocrine Organ

Glands that secrete hormones directly into the bloodstream to regulate processes such as growth, metabolism, and reproductive functions.

Hormonal Communications

A process within the endocrine system where glands produce hormones that are released into the bloodstream to regulate bodily functions.

Neural Communications

The process by which neurons transmit signals through synapses to communicate with other neurons, muscles, or glands.