In a Certain Year the Aggregate Demand at the Existing

question 227

Multiple Choice

In a certain year the aggregate demand at the existing price level consists of $100 billion of consumption, $40 billion of investment, $10 billion of net exports, and $20 billion of government purchases.Full-employment GDP is $200 billion.To obtain full employment under these conditions the government should:

• A)encourage personal saving by increasing the interest rate on government bonds.
• B)decrease government expenditures.
• C)reduce tax rates and increase government spending.
• D)discourage private investment by increasing corporate income taxes.

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Definitions:

Personal Property

Refers to movable items owned by an individual or entity, as opposed to real property which relates to land and buildings.

Unlawful Taking

The illegal appropriation or seizure of property without permission or legal right.

Conversion

In law, an act of wrongfully taking, using, or disposing of the personal property of another without consent.

Wrongfully Taking

Illegally taking possession of someone else's property without permission, akin to theft or larceny.