Scenario 34-2

question 102

Multiple Choice

Scenario 34-2. The following facts apply to a small economy.
• Consumption spending is $6,720 when income is $8,000.
• Consumption spending is $7,040 when income is $8,500.
-Refer to Scenario 34-2. In response to which of the following events could aggregate demand increase by $1,500?

• A)A stock-market boom stimulates consumer spending by $300, and there is an operative crowding-out effect.
• B)A stock-market boom stimulates consumer spending by $550, and there is a small operative crowding-out effect.
• C)An economic boom overseas increases the demand for U.S.net exports by $550, and there is no crowding-out effect.
• D)An economic boom overseas increases the demand for U.S.net exports by $300, and there is no crowding-out effect.

---

Definitions:

Behavioral Economists

Economists who study the impacts of psychological, cognitive, emotional, cultural, and social factors on economic decisions made by individuals and institutions.

Behavioral Economics

An area of economics that incorporates insights from psychology to understand decision-making and economic behavior that deviates from classical economic theories.

Job Offer

A proposal made by an employer to a potential employee detailing the terms of employment, including position, salary, and benefits.

Current Positions

Refers to the existing financial holdings, assets, or job titles held by an individual or entity at a specific point in time.