(Table: Keynesian Equilibrium Analysis with Taxes and Net Exports) Given

question 212

Multiple Choice

(Table: Keynesian Equilibrium Analysis with Taxes and Net Exports) Given the data in the table, if full employment income is $1,000 while the current equilibrium is $750, a(n) _____ gap exists, such that a(n) _____ in spending equal to _____ is needed to close the gap.

• A) inflationary; decrease; $100
• B) inflationary; decrease; $250
• C) recessionary; increase; $100
• D) recessionary; increase; $250

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Definitions:

Profit and Loss Basis

Profit and Loss Basis is a method of accounting that records revenues and expenses as they are earned or incurred, used to determine a company's financial performance over a period.

Liquidation Expenses

Costs associated with converting assets into cash or paying off debt during the winding up of a business.

Book Value

The net value of a company's assets minus its liabilities, often used to assess if a stock is under or overvalued.

Final Settlement

The conclusive resolution of a financial contract's obligation, often through payment or the transfer of assets.