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

question 121

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 925,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:

Dependent Variable

The factor or condition that is measured at the end of an experiment and is presumed to vary as a result of the manipulations of the independent variable(s).

Aggression

Conduct aimed at causing pain or fear in others, manifested through either physical aggression or verbal assaults.

Positive Correlation

A relationship between two variables where an increase in one variable is associated with an increase in the other variable.

Independent Variable

In an experiment, a factor or condition that is deliberately manipulated to determine whether it causes any change in another behavior or condition.