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:

Real Customers

Individuals or entities that purchase and use products or services in a genuine or authentic context.

Moore's Law

The observation that the number of transistors on a microchip doubles approximately every two years, leading to an exponential increase in computing power.

Metcalf's Law

Metcalfe's Law states that the value of a telecommunications network is proportional to the square of the number of connected users of the system, emphasizing the exponential value increase with more users.

Technology Sea Change

A significant and fundamental transformation in technology that leads to wide-reaching changes in society or industry.