If Planned Aggregate Expenditure (PAE)in an Economy Equals 5,000

question 69

Multiple Choice

If planned aggregate expenditure (PAE) in an economy equals 5,000 + 0.48Y and potential output (Y*) equals 9,000,then this economy has

• A) an expansionary gap.
• B) a recessionary gap.
• C) no output gap.
• D) an income-expenditure multiplier equal to 8.
• E) an income-expenditure multiplier equal to 9.

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Definitions:

Renew

To restore to a fresh condition or to regenerate, often referring to natural resources, energy, or policies aimed at sustainability.

Conquering

The act of gaining control over a territory, region, or geopolitical entity, often involving military force.

Native People

Indigenous populations originally inhabiting a particular region, possessing unique cultures, traditions, and often experiencing impacts from colonization and modern development.

Land

The solid part of the earth's surface that is not covered by water, encompassing various terrain and ecosystems.