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:

Marginal Probability Distribution

The probability distribution for a subset of variables within a multi-variable distribution, ignoring the presence or effects of the other variables.

Mobile Phone Store

It is a retail establishment that specializes in selling mobile phones and related accessories and services.

Mobile Phone Store

A store focused on selling mobile phones and their corresponding accessories.

Probability Distribution

A function that mathematically assesses the probability of each possible outcome in an experiment.