If Short-Run Equilibrium Output Equals 10,000, the Income-Expenditure Multiplier Equals

question 66

Multiple Choice

If short-run equilibrium output equals 10,000, the income-expenditure multiplier equals 5, potential output (Y*) equals 11,000, then government purchases must ________ to eliminate any output gap.

• A)increase by 200
• B)increase by 1,000
• C)increase by 5,000
• D)decrease by 200

---

Definitions:

Protection

Measures or actions taken to guard against harm, damage, loss, or unwanted outcomes.

Temperament

The innate or genetically influenced aspect of an individual's personality, such as introversion or extroversion, that affects their behavior and emotional reactions.

Wary

Feeling or showing caution about possible dangers or problems.

Hesitant

Feeling or showing uncertainty about doing something.