You Are Given the Following Information About Aggregate Demand at the Existing

question 32

Multiple Choice

You are given the following information about aggregate demand at the existing price level for an economy: (1) consumption = $500 billion, (2) investment = $50 billion, (3) government purchases = $100
Billion, and (4) net export = $20 billion. If the full-employment level of GDP for this economy is $620
Billion, then what combination of actions would be most consistent with closing the GDP gap here?

• A) increase government spending and taxes
• B) decrease government spending and taxes
• C) decrease government spending and increase taxes
• D) increase government spending and decrease taxes

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Definitions:

Unpleasant Outcome

A result of actions or decisions that is negative or less favorable than anticipated, causing dissatisfaction or adverse effects.

Verbal Reprimand

A disciplinary action involving a spoken warning or rebuke to an employee for unsatisfactory performance or behavior.

Demotion

The act of lowering an employee's rank or position, typically as a result of organizational restructuring, performance issues, or disciplinary actions.

Motivation Theories

A set of theories designed to understand, explain, and predict the forces that drive individuals to engage in particular behaviors.