If Planned Aggregate Expenditure Equals 5,000 + 0

question 27

Multiple Choice

If planned aggregate expenditure equals 5,000 + 0.55Y and potential output (Y*) equals 12,000,then this economy has a(n) __________ gap that can be closed by _________.

• A) expansionary;increasing taxes
• B) expansionary;increasing transfer payments
• C) expansionary;increasing government purchases
• D) recessionary;increasing government purchases
• E) recessionary;increasing taxes

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Definitions:

Volume

The amount of space that an object or substance occupies.

Endoplasmic Reticulum

A membrane-bound organelle in eukaryotic cells involved in the synthesis, folding, modification, and transport of proteins and lipids.

Ribosomes

Cellular organelles that serve as the site of protein synthesis, translating mRNA into polypeptide chains.

Intracellular Digestion

The breakdown of nutrients within the cytoplasm of a cell as a part of the metabolic process.