A Country's Real GDP Level Is $800 Billion, and Its

question 4

Multiple Choice

A country's real GDP level is $800 billion, and its full-employment real GDP level is $920 billion. If the MPC = 2/3 and the full potential expenditure multiplier effect occurs, which of the following policies would move the economy to a full-employment equilibrium?

• A) Government purchases are decreased by $20 billion.
• B) Government purchases are increased by $60 billion.
• C) Government purchases are increased by $120 billion.
• D) Government purchases are increased by $40 billion.

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Definitions:

COSEWIC

The Committee on the Status of Endangered Wildlife in Canada, responsible for assessing the conservation status of species at risk.

Canadian Wildlife

encompasses the diverse range of animals, birds, and marine species native to Canada, thriving in its varied climates and ecosystems.

Science-Based Recommendations

Advice or guidelines developed through scientific research and analysis.

Biophilia

The inherent human inclination to affiliate with nature and living organisms, theorized to be a fundamental aspect of human nature.