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

question 65

Multiple Choice

If short-run equilibrium output equals 10,000, the income-expenditure multiplier equals 10, the mpc equals 0.9, and potential output (Y*) equals 9,000, then taxes must be increased by approximately ________ to eliminate any output gap.

• A)90
• B)100
• C)111
• D)1,000

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Definitions:

Purchasing Cards

Specialized payment cards issued by organizations to their employees to make purchases on behalf of the organization, streamlining the procurement process.

Online Payments

Transactions that enable individuals to pay for products or services over the internet using digital financial instruments, such as credit cards, electronic wallets, or bank transfers.

Electronic Storefront

The website of a single company, with its own Internet address, at which orders can be placed.

Single Store

A retail business that operates from one physical location, offering products or services to customers from that sole position.