-Using the Data in the Above Table, If Potential GDP

question 9

Multiple Choice

-Using the data in the above table, if potential GDP for this economy is $25 billion, then in order to restore full employment, the cash rate can be

• A) raised so that consumption expenditure, investment and net exports increase.
• B) lowered so that consumption expenditure, investment and net exports increase.
• C) lowered so that government expenditure on goods and services increases.
• D) raised so that net exports increase.
• E) lowered so that consumption expenditure and investment increase, though net exports decrease.

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Definitions:

Monro-Kellie Doctrine

A physiological principle stating that the total volume inside the cranial cavity is fixed, comprising brain tissue, cerebrospinal fluid, and blood; changes in one component must be compensated by changes in the others to maintain pressure balance.

Osmotic Diuretic

A type of diuretic drug that inhibits reabsorption of water and sodium, increasing urine production to reduce fluid in the body.

Antihypertensive

A type of medication used to lower high blood pressure.

Antipyretic

A medication or substance used to reduce fever.