Figure 12-3 -Refer to Figure 12-3.Suppose That Government Spending Increases,shifting Up the Increases,shifting

question 109

Multiple Choice

Figure 12-3
-Refer to Figure 12-3.Suppose that government spending increases,shifting up the aggregate expenditure line.GDP increases from GDP1 to GDP2,and this amount is $400 billion.If the MPC is 0.75,then what is the distance between N and L or by how much did government spending change?

• A)$10 billion
• B)$100 billion
• C)$200 billion
• D)$300 billion

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Definitions:

Posterior Probabilities

The probabilities updated in light of new evidence, reflecting the likelihood of events after taking into account the known data.

Prior Probabilities

The probabilities of events based on prior knowledge before any new evidence is considered.

Likelihood Probabilities

The probabilities that quantify the plausibility of different parameter values for a statistical model given the observed data.

Posterior Probabilities

The probabilities that are adjusted after taking into account known or observed evidence, particularly in the context of Bayesian inference.