If Aggregate Spending in an Economy Can Be Written as Y

question 148

Multiple Choice

If aggregate spending in an economy can be written as Y = 15,000 + 0.6Y - 20,000r, and potential output equals 34,000, what real interest rate must the Federal Reserve set to bring the economy to full employment?

• A) 7 percent
• B) 3 percent
• C) 6 percent
• D) 5 percent

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Definitions:

Money Laundering

The illegal process of making large amounts of money generated by a criminal activity, such as drug trafficking or terrorist funding, appear to be earned legally.

Federal Agencies

Specialized organizations within the federal government, each with specific responsibilities and authority in areas such as health, safety, and environmental protection.

Anticompetitive Mergers

Mergers between companies that significantly reduce market competition, potentially leading to higher prices and reduced innovation.

AT&T

A multinational conglomerate holding company and one of the world's largest telecommunications firms, providing mobile telephone, broadband, and subscription television services.