The Figure Shows Planned Aggregate Expenditure and Output for an Economy

question 133

Multiple Choice

The figure shows planned aggregate expenditure and output for an economy. If output in this economy is Y₃, we would expect there to be _______ in production because PAE is _______ actual output.

• A) an increase; less than
• B) an increase; greater than
• C) no change; equal to
• D) a decrease; less than

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Definitions:

Equality

The state of being equal, especially in status, rights, and opportunities.

Political Value

Fundamental beliefs or standards that guide individual or societal decisions and policies in the political arena.

Legitimacy

The rightful status, accepted and recognized by the public or law, that gives a government or ruling body authority over its subjects.

Liberty

The condition of liberty in society from authoritarian limitations on one's lifestyle, conduct, or political opinions.