Refer to Table 9 If the Full-Employment Level of Income (Y_F)in Table 9

question 137

Multiple Choice

Refer to Table 9.2.(Data are expressed in billions of dollars. ) Table 9.2
$\begin{array}{|r|r|r|c|c|}\hline \begin{array}{r}\text { Full Employment } \\\text { Income (Output) }\end{array} & \begin{array}{c}\text { Consumers } \\\text { Desire to Spend }\end{array} & \begin{array}{c}\text { Investors Desire } \\\text { to Spend }\end{array} & \begin{array}{c}\text { Total Private } \\\text { Spending }\end{array} & \begin{array}{c}\text { Total } \\\text { Saving }\end{array} \\\hline \$ 500 & \$ 300 & \$ 250 & \$ & \$ \\\hline 600 & 375 & 250 & \$ & \$ \\\hline 700 & 450 & 250 & \$ & \$ \\\hline 800 & 525 & 250 & \$ & \$ \\\hline\end{array}$
If the full-employment level of income (Y_F) in Table 9.2 is $700 billion,

• A)The economy is in equilibrium.
• B)There is a recessionary gap of $250 billion.
• C)There is an inflationary gap of $450 billion.
• D)There is an inflationary gap of $700 billion.

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Definitions:

Autonomy

The degree to which an individual has the freedom to make decisions and take actions without external control or influence.

Expectancy Theory

A motivational theory positing that individuals are more likely to perform actions if they expect their efforts to lead to successful outcomes and valuable rewards.

Goal Specificity

The clarity and preciseness of a goal, making it explicit and defined, which can aid in motivating individuals to achieve it.

Expectancy

A person's belief about how their effort will lead to a certain level of performance and the anticipated outcomes of that performance.