Given Full-Employment Output = $2,800, Equilibrium Output = $2,500, and MPS

question 160

Multiple Choice

Given full-employment output = $2,800, equilibrium output = $2,500, and MPS = 0.25, which of the following changes would most likely bring the economy to a full-employment level of national output?

• A)$300 decrease in taxes.
• B)$75 increase in government spending.
• C)$75 decrease in taxes.
• D)$300 increase in government spending.
• E)$75 decrease in government spending.

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Definitions:

Laccolith

A geological formation resulting from magma pushing up between layers of rock, creating a lens-shaped mass.

Columnar Joints

Natural formations of rock into long, regular columns, typically found in basalt flows, resulting from the cooling and contraction of lava.

Igneous Rock

Rock formed through the cooling and solidification of magma or lava, categorized into intrusive or extrusive depending on the environment of formation.

Sierra Nevada

A mountain range in the Western United States, known for its dramatic landscapes, including Yosemite Valley and Lake Tahoe.