In an Economy Where Planned Aggregate Spending Is Given by PAE

question 36

Multiple Choice

In an economy where planned aggregate spending is given by PAE = 5,500 + 0.6Y − 20,000r, the interest rate is currently 5 percent (0.05) . If potential output equals 11,750, the central bank must ________ the interest rate to close the ________ gap.

• A)reduce; expansionary
• B)reduce; recessionary
• C)raise; recessionary
• D)raise; expansionary

Recognize that a high \(R^2\) value does not confirm the appropriateness of a regression model.

Analyze and predict outcomes based on given data and regression results.

Understand different bases of power and how they influence organizational behavior.

Recognize the importance of impression management and its techniques.

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