You Are Given the Following Information About Aggregate Demand at the Existing

question 19

Multiple Choice

You are given the following information about aggregate demand at the existing price level for an economy: (1) consumption = $500 billion; (2) investment = $50 billion; (3) government purchases = $100 billion; and (4) net export = $20 billion.If the full-employment level of GDP for this economy is $620 billion, then what combination of actions would be most consistent with the goal of achieving price level stability?

• A)increase government spending and taxes
• B)decrease government spending and taxes
• C)decrease government spending and increase taxes
• D)increase government spending and decrease taxes

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Definitions:

Co-Owner

An individual or entity that shares ownership of an asset, property, or business with one or more parties.

Venture Capitalists

Investors who provide capital to startups and small businesses with long-term growth potential in exchange for equity, or partial ownership of the company.

Angel Investors

Wealthy individuals who provide capital for start-ups or entrepreneurs in exchange for ownership equity or convertible debt.

High-Potential

Refers to individuals or assets with the capacity to develop significantly beyond their current level of performance or value, often focusing on future leadership or investment growth.