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

question 213

Multiple Choice

You are given the following information about aggregate demand at the existing price level for an economy: (1) consumption = $400 billion; (2) investment = $40 billion; (3) government purchases = $90 billion; and (4) net export = $25 billion.If the full-employment level of GDP for this economy is $600 billion, then what combination of actions would be most consistent with the goal of achieving full employment?

• 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

---

Definitions:

Carboniferous

A geologic period and system that spans 60 million years from the end of the Devonian Period about 358.9 million years ago to the beginning of the Permian Period, known for its vast coal beds.

Ordovician

A period in the Earth's geologic timescale that occurred about 488 to 443 million years ago, distinguished by significant biological diversification.

Cretaceous

The geological period between 145 and 66 million years ago, noted for the dominance of dinosaurs and the appearance of flowering plants.

Extinction Event

A significant loss of biodiversity occurring rapidly due to factors like climatic changes, habitat destruction, or the impact of humankind.