In a Certain Year, the Aggregate Amount Demanded at the Existing

question 42

Multiple Choice

In a certain year, the aggregate amount demanded 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 $120 billion.To obtain price-level stability under these conditions, the government should

• A)increase tax rates and/or reduce government spending.
• B)discourage personal saving by reducing the interest rate on government bonds.
• C)increase government expenditures.
• D)encourage private investment by reducing corporate income taxes.

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Definitions:

Bosses

Individuals who are in charge of or manage others in a workplace setting.

Power

The ability or capacity to direct or influence the behavior of others or the course of events.

Popular

Well-liked or favored by a large number of people; commonly accepted or approved.

Jane Addams

A pioneering social reformer and pacifist, co-founder of Hull House, and notable figure in the history of social work and women's suffrage in the United States.