In a Certain Year the Aggregate Amount Demanded at the Existing

question 210

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 $200 billion. To obtain full employment under these conditions, the
Government should

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

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Definitions:

Photoreceptors

Specialized cells in the retina of the eye that respond to light.

Iodopsin

A type of photopsin, which is a photoreceptor protein found in the cones of the retina that is responsible for color vision.

Lateral Geniculate

A relay center in the thalamus of the brain that is involved in the processing of visual information.

Optic Tract

Tract that extends from the optic chiasma to the lateral geniculate nucleus of the thalamus.