If Planned Aggregate Expenditure (PAE)in an Economy Equals 2,000

question 114

Multiple Choice

If planned aggregate expenditure (PAE) in an economy equals 2,000 + 0.5Y and potential output (Y*) equals 4,400,government purchases must ________ to eliminate any output gap.

• A) increase by 20
• B) increase by 200
• C) increase by 250
• D) decrease by 200
• E) decrease by 250

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Definitions:

Clinical Psychologists

Professionals in psychology who assess, diagnose, and treat mental illnesses and behavioral disorders through psychotherapy and other methods.

Basic Researchers

Scientists who conduct studies primarily to increase the understanding of fundamental principles and theories, often without immediate practical applications.

Applied Psychologists

Professionals who use the principles of psychology to solve practical problems in fields such as education, marketing, or mental health.

Social-cultural Perspective

An approach in psychology that examines how societal and cultural factors influence behavior and thinking.