In a Certain Year the Aggregate Amount Demanded at the Existing

question 47

Multiple Choice

In a certain year the aggregate amount demanded 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 $120 billion.To obtain price level stability under these conditions the government should:

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

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Definitions:

Bayard Rustin

An American leader in social movements for civil rights, socialism, nonviolence, and gay rights, pivotal in organizing the 1963 March on Washington.

Militant Action

The use of confrontational or aggressive tactics in support of a political or social cause.

Bandung

A city in Indonesia known for hosting the first large-scale Asian-African Conference in 1955, which aimed to promote economic and cultural cooperation and to oppose colonialism.

Richard Wright

An African American author and social commentator of the 20th century, best known for his novel "Native Son" and autobiography "Black Boy," exploring themes of race, politics, and social injustice.