If Planned Aggregate Expenditure (PAE)in an Economy Equals 4,000

question 88

Multiple Choice

If planned aggregate expenditure (PAE) in an economy equals 4,000 + 0.6Y and potential output (Y*) equals 9,800,taxes must be increased by ________ (rounded to the nearest whole number) to eliminate any output gap.

• A) 10
• B) 100
• C) 1,000
• D) 33
• E) 133

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Definitions:

Psychological Stress

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A disease characterized by the uncontrolled division of abnormal cells in a part of the body, potentially leading to tumors, spread to other areas, and impairment of normal bodily functions.

Leading Cause

The primary factor or condition that contributes most significantly to a particular outcome or event.