If Planned Aggregate Expenditure (PAE)in an Economy Equals 1,000

question 18

Multiple Choice

If planned aggregate expenditure (PAE) in an economy equals 1,000 + 0.5Y and potential output (Y*) equals 2,200,government purchases must ________ to eliminate any output gap.

• A) increase by 10
• B) increase by 100
• C) increase by 1,000
• D) decrease by 1,000
• E) decrease by 100

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Definitions:

Net Monetary Cost

The total amount of money expended minus any financial gains, typically used to assess the total cost of an investment or purchase.

Training Costs

Expenses associated with the development, delivery, and materials needed for training programs, including instructor fees, technology, spaces, and resources.

Return On Investment

A financial metric used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments, often expressed as a ratio or percentage.

CEOs

Chief Executive Officers; the highest-ranking individuals in a company or organization, responsible for making major corporate decisions and managing overall operations and resources.