Voters are often influenced by opinion polls. They end up voting for the party that is likely to win according to the opinion poll. This occurs due to ________

If the MPC is 3/5 then the multiplier is

a. 4, so a $100 increase in government spending increases aggregate demand by $400. b. 1.5, so a $100 increase in government spending increases output by $150. c. 2.5, so a $100 increase in government spending increases aggregate demand by $250. d. 1.67, so a $100 increase in government spending increases output by $166.67.

Anchoring:

A. can influence decision making with irrelevant information. B. explains why, for example, hamburger will be advertised as 80% lean rather than 20% fat. C. causes losses to be felt more intensely than gains. D. explains why, for example, firms prefer to reduce package sizes to raising prices.