In an Economy Where Planned Aggregate Spending Is Given by PAE

question 35

Multiple Choice

In an economy where planned aggregate spending is given by PAE = 5,500 + 0.6Y − 20,000r, the interest rate is currently 2 percent (0.02) . If potential output equals 8,000, the central bank must ________ the interest rate to close the ________ gap.

• A)lower; expansionary
• B)lower; recessionary
• C)raise; recessionary
• D)raise; expansionary

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Definitions:

Universal Recipients

Individuals, typically with AB+ blood type, who can receive red blood cells from any blood type without risk of an adverse reaction due to the absence of anti-A, anti-B, and anti-Rh antibodies.

Type AB Blood

A blood group characterized by the presence of both A and B antigens on the surface of red blood cells, resulting in the capability to accept A, B, AB, and O blood types.

Codominance

A genetic scenario where both alleles for a trait are fully expressed in the phenotype of the heterozygotes, showing both characteristics independently.

Phenotypic Effects

Observable traits or characteristics of an organism resulting from the interaction of its genotype with the environment.