Complete Table 9 $\text { Table } 9.2$ If the Full-Employment Level of Income (Y_F)in Table 9

question 66

Multiple Choice

Complete Table 9.2.(Data are expressed in billions of dollars.) $\begin{array}{cccc}\text { Full Employment } & \text { Consumers } & \text { Investors Desire } & \text { Total Private } \\\text { Income (Output) } & \text { Desire to Spend } & \text { to Spend } & \text { Spending }&\text { Total Saving }\\\hline\$ 500 & \$ 300 & \$ 250&\$\_\_\_&\$\_\_\_ \\600 & 375 & 250&\$\_\_\_&\$\_\_\_ \\700 & 450 & 250&\$\_\_\_&\$\_\_\_ \\800 & 525 & 250&\$\_\_\_&\$\_\_\_\end{array}$

$\text { Table } 9.2$ If the full-employment level of income (Y_F) in Table 9.2 is $800 billion,

• A)The economy is in equilibrium.
• B)There is a recessionary gap of $25 billion.
• C)There is an inflationary gap of $250 billion.
• D)There is a recessionary gap of $275 billion.

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Definitions:

Debt-Equity Ratio

The ratio of a firm's total liabilities to its shareholders' equity, used to assess financial leverage.

Financial Risk

The possibility of losing money on an investment or business venture, often associated with the uncertainty of returns.

Value of a Firm

The total worth of a company, determined by factors such as its assets, earnings, market position, and future growth prospects.

Debt

An amount of money borrowed by one party from another, to be repaid typically with interest.