Suppose the Economy Is in an Equilibrium in Which Real

question 107

Multiple Choice

Suppose the economy is in an equilibrium in which real GDP is less than potential GDP.To increase real GDP,the government can use a fiscal stimulus of

• A)increasing taxes only.
• B)decreasing government expenditure only.
• C)decreasing taxes and/or increasing government expenditure.
• D)decreasing government expenditure and simultaneously increasing taxes.
• E)increasing the quantity of money.

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Definitions:

Compound

An entity made up of multiple elements chemically joined in constant ratios.

Chebysheff's Theorem

A statistical theorem stating that for any data set or distribution, no matter the shape, a minimum proportion of values must lie within a certain number of standard deviations from the mean.

Standard Deviation

A measure of the amount of variation or dispersion in a set of values, indicating how spread out the values are around the mean.

Sales Receipts

Documents that provide proof of a transaction between a buyer and a seller.