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

question 26

Multiple Choice

If planned aggregate expenditure (PAE) in an economy equals 2,000 + 0.6Y and potential output (Y*) equals 4,900,transfer payments must be decreased by ________ (rounded to the nearest whole number) to eliminate any output gap.

• A) 67
• B) 200
• C) 225
• D) 250
• E) 1,000

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Definitions:

Executory Costs

Expenses related to ongoing maintenance and administration of a lease that are neither fixed nor included in the lease payments.

Annual Payments

Yearly amounts paid or received over the term of a financial instrument or agreement.

Lessor

The party in a lease agreement who owns the leased asset and grants the lessee the right to use the asset for a specified term in exchange for payment.

Amortization Policies

Guidelines or practices a company follows to systematically reduce the book value of its intangible assets over their useful life.