An Economy's Potential Output Is Equal to $22 Billion,and Its

question 19

Multiple Choice

An economy's potential output is equal to $22 billion,and its current output is equal to $20 billion.If the marginal propensity to consume has a value of 0.9,then the government should increase spending by ________ billion to return the economy to the long-run equilibrium.

• A) $0.2
• B) $1.8
• C) $2
• D) $10
• E) $1

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Definitions:

Moore's Law

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

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Memory-Management Technique

Strategies and methods used by an operating system to manage computer memory, including allocation and deallocation of memory and ensuring efficient utilization of memory resources.

RAM Allocation

The process of assigning a specific portion of Random Access Memory (RAM) by a computer's operating system or application to enhance performance.