If the Equation for Planned Aggregate Expenditure Is Given by PAE

question 82

Multiple Choice

If the equation for planned aggregate expenditure is given by PAE = 4,000 + 0.6Y and potential output is equal to 9000,then there is a(n) ________ gap equal to ________ units,so if net exports ________ by ________,the economy will return to potential output.

• A) expansionary;1,000;decrease;400
• B) expansionary;100;decrease;40
• C) expansionary;5,000;increase;2,000
• D) recessionary;1,000;increase;400
• E) recessionary;100;increase;40

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Definitions:

Machine-Hours

A unit measure representing the operating time of machinery, used in calculating production costs and allocating expenses based on machine usage.

Molding

The process of shaping a material by introducing it into a rigid frame called a mold.

Customizing

The process of modifying products or services to meet specific customer demands or preferences.

Manufacturing Cost

The total expense incurred in the production of goods, including raw materials, labor, and overhead.