Suppose the President Is Successful in Passing a $5 Billion

question 57

Multiple Choice

Suppose the president is successful in passing a $5 billion tax increase.Assume that taxes are fixed,the economy is closed,and the marginal propensity to consume is 0.75.What happens to equilibrium GDP?

• A)There is a $20 billion increase in equilibrium GDP.
• B)There is a $20 billion decrease in equilibrium GDP.
• C)There is a $15 billion increase in equilibrium GDP.
• D)There is a $15 billion decrease in equilibrium GDP.

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Definitions:

Semantic Encoding

The process of encoding information according to its meaning to help in its retention and retrieval from memory.

Visualizing

Visualizing involves forming mental images or concepts, often used as a technique in problem-solving, learning, and goal setting.

Rhyming Words

Words that sound similar or the same at the end when pronounced.

Elaborative Coding

A cognitive processing technique that involves making information more memorable by enriching it with meaningful associations.