Figure 34-6

question 383

Multiple Choice

Figure 34-6. On the left-hand graph, MS represents the supply of money and MD represents the demand for money; on the right-hand graph, AD represents aggregate demand. The usual quantities are measured along the axes of both graphs.

-Refer to Figure 34-6. Suppose the multiplier is 5 and the government increases its purchases by $15 billion. Also, suppose the AD curve would shift from AD1 to AD2 if there were no crowding out; the AD curve actually shifts from AD1 to AD3 with crowding out. Also, suppose the horizontal distance between the curves AD1 and AD3 is $55 billion. The extent of crowding out, for any particular level of the price level, is

• A) $75 billion.
• B) $40 billion.
• C) $30 billion.
• D) $20 billion.

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Definitions:

Continuance Commitment

The level of commitment an individual feels to an organization based on the costs they perceive in leaving it.

Normative Commitment

An individual's psychological attachment to an organization, characterized by a feeling of obligation to remain with the organization.

Affective Commitment

The emotional attachment an employee feels towards their organization, influencing their willingness to remain a part of it.

Continuance Commitment

A form of commitment that is based on the costs that an individual associates with leaving an organization.