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The order for the chain of events for the Keynesian model is for a change in ___

ID: 1212433 • Letter: T

Question

The order for the chain of events for the Keynesian model is for a change in ________ to lead to a change in ________, which is then multiplied resulting in a change in ________.

investment; animal spirits; the price level

business confidence; investment; real GDP

the Fed's intermediate targets; the Fed's goals; real GDP

real GDP; income; consumption

A:

investment; animal spirits; the price level

B:

business confidence; investment; real GDP

C:

the Fed's intermediate targets; the Fed's goals; real GDP

D:

real GDP; income; consumption

Explanation / Answer

The correct answer is option (B).