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

question 52

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.

---

Definitions:

Maturational Loss

The emotional pain or distress experienced due to the natural progression or changes in one's life.

Kindergarten

An educational approach or institution for young children typically aged 4-6 years, focusing on introducing basic skills and social behavior prior to starting elementary school.

Actual

Pertains to what is real, factually existing, or currently happening as opposed to what is theoretical or possible.

Situational

Relating to or dependent upon the specific circumstances or context of an event or situation.