If Planned Aggregate Expenditure (PAE)in an Economy Equals 3,500

question 4

Multiple Choice

If planned aggregate expenditure (PAE) in an economy equals 3,500 + 0.5Y and potential output (Y*) equals 8,000,then this economy has

• A) an expansionary gap.
• B) a recessionary gap.
• C) no output gap.
• D) an income-expenditure multiplier equal to 5.
• E) an income-expenditure multiplier equal to 9.

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Definitions:

Medications

Substances used to diagnose, treat, cure, or prevent diseases and conditions, typically administered orally, topically, or via injection.

Mental Disorders

A wide range of conditions affecting mood, thinking, behavior, and perception, significantly impacting daily life and functioning.

Electroconvulsive Therapy

A psychiatric treatment involving electrically induced seizures to provide relief from severe mental disorders.

Brain Seizure

A sudden surge of electrical activity in the brain that can affect how a person appears or acts for a short time and often results in convulsions, muscle spasms, or loss of consciousness.