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

---

Definitions:

Token Economy

A behavior modification system that utilizes tokens as a form of currency that can be exchanged for desired rewards or privileges, aimed at increasing desirable behaviors.

Community Living

A residential living arrangement that offers a supportive, structured environment for individuals, particularly those with disabilities or special needs, to foster independence and social interaction.

Institutional Setting

An environment or facility designed for specific purposes such as healthcare, education, or incarceration, where structured routines and regulations are in place.

Token Economy

A behavior modification method often used in therapeutic settings, where desired behaviors are rewarded with tokens that can be exchanged for various rewards.