Suppose That the Economy Is Experiencing an Expansionary Gap of $1,000

question 116

Multiple Choice

Suppose that the economy is experiencing an expansionary gap of $1,000 and the MPC equals 0.8.With an upward-sloping short-run aggregate supply curve,the government can close the gap if it decreases purchases by

• A)$1,000
• B)$800
• C)$200
• D)more than $200
• E)less than $200

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Definitions:

Dominating

Dominating refers to exercising control or influence over others in a way that often suppresses open exchange and promotes one's own agenda.

Avoiding

A conflict management strategy or coping mechanism where an individual decides not to engage with or address a particular problem, situation, or confrontation.

Harmonizing

The process of making things compatible or consistent, often used in the context of team or interpersonal relations.

Task-Oriented

Focused on accomplishing specific tasks or objectives, often prioritizing work and goals over personal relationships.