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.

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Definitions:

Schema Accessibility

The ease with which a mental schema is activated in one's mind, influencing perception and behavior in specific situations.

Salience

The quality of being particularly noticeable or important; the state or condition of something that stands out or is prominently perceived.

Accessibility

The ease with which information, resources, or services can be reached or used by people.

Priming

A cognitive process where exposure to one stimulus influences the response to a subsequent stimulus, without conscious guidance.