In a Certain Economy,the Components of Planned Aggregate Expenditure Are

question 37

Multiple Choice

In a certain economy,the components of planned aggregate expenditure are given by:
C = 60 + 0.6(Y - T) - 1,000r
I = 200 - 1,000r
G = 200
NX = 50
If potential output equals 775,net taxes equal 100 and the central bank sets the interest rate equal to 0.05 (5%) ,then at the short-run equilibrium,there is a(n) ______ gap of _______.

• A) expansionary;50
• B) expansionary;100
• C) recessionary;150
• D) recessionary;100
• E) recessionary;50

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Definitions:

Manipulation

The act of skillfully controlling or influencing something or someone, often in a deceptive way.

Process Theories

Explanations focusing on how things happen through a sequence of actions or steps leading to a particular outcome.

Work Motivation

The internal and external factors that stimulate desire and energy in people to be continually interested and committed to a job, role, or subject, or to make an effort to attain a goal.

Motivates Workers

Factors or conditions that stimulate people to act or behave in a way that achieves job satisfaction or fulfillment.