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

question 113

Multiple Choice

If planned aggregate expenditure (PAE) in an economy equals 5,000 + 0.6Y and potential output (Y*) equals 13,000,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:

First-Grade Steel

First-grade steel is a classification of steel indicating premium quality, meeting the highest standards of strength, durability, and purity.

Bonafide Purchase

The acquisition of goods or property in good faith without knowledge of any defects or claims against it.

Forged Cheque

refers to a check that has been illegally altered or signed without the account holder’s authorization, often with fraudulent intent.

Ownership Transfer

The process by which the legal rights and responsibilities of an asset are passed from one person or entity to another.