Government Spending Is a Variable That Is Exogenous to the AS/AD

question 117

True/False

Government spending is a variable that is exogenous to the AS/AD model.

---

Definitions:

Violates WARP

Refers to a situation where an individual's choice behavior contradicts the Weak Axiom of Revealed Preferences, suggesting inconsistency in their preferences.

Bundle

A combination of goods or services that are sold or consumed together.

Revealed Preferred

Another term for revealed preference, emphasizing the process of deducing preferences by observing actual choices under constraints.

Violates WARP

Deviating from the Weak Axiom of Revealed Preference, indicating inconsistencies in consumer choice under the assumption of rational behavior.