If the Gap Between the Actual Level of Output and the "Natural

question 46

Multiple Choice

If the gap between the actual level of output and the "natural real GDP" is 1000 and the marginal leakage rate is 0.5 then the simple Keynesian model suggests that the government could close the gap by

• A)increasing autonomous expenditures by 1000.
• B)increasing autonomous expenditures by 250.
• C)increasing autonomous expenditures by 500.
• D)decreasing taxes by 500.

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A form of reasoning in which a conclusion is drawn from two given or assumed premises, involving three terms that relate in a specific way.

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