The Figure Given Below Depicts Macroeconomic Equilibrium in a Closed

question 60

Multiple Choice

The figure given below depicts macroeconomic equilibrium in a closed economy. Assume that the spending multiplier in this economy is 1.5.
Figure 10.5

-Refer to Figure 10.5. Suppose that instead of there being a recessionary gap, the economy is characterized by an equilibrium real GDP level of $900 that exceeds the natural unemployment or potential real GDP level by $600. This so-called expansionary gap can be closed by:

• A) increasing planned aggregate expenditures by $400.
• B) lowering government purchases by $600.
• C) lowering autonomous consumption spending by $400.
• D) increasing planned aggregate expenditures by $900.
• E) lowering autonomous net exports by $600.

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Definitions:

Desired Results

Specific outcomes or objectives that an individual or organization aims to achieve through their actions or strategies.

Control Equation

A tool or formula used in management and operations to assess and maintain the balance between desired outputs and various inputs or processes.

Performance Expectations

The standards or requirements set by an employer regarding how tasks should be performed and goals should be achieved by employees.

Performance Deviations

Refer to variances between actual performance and the expected standard or goals, necessitating corrective actions or adjustments.