In Macroland,the Components of Planned Aggregate Expenditure Are Given By

question 17

Multiple Choice

In Macroland,the components of planned aggregate expenditure are given by:
C = 100 + 0.9(Y - T) - 500r
I = 150 - 1,000r
G = 200
NX = 50
If potential output equals 3,200,net taxes equal 100,and the central bank sets the interest rate to equal 0.05 (5%) ,then the bank must _____ the interest rate to ______ to restore full employment.

• A) raise;6%
• B) raise;7%
• C) lower;4%
• D) lower;3%
• E) lower;2%

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Definitions:

Same Size

A principle or perception where objects are understood to maintain constant size, despite changes in their distance from the observer.

Retinal Disparity

The slight difference in the images projected on our two retinas because of the different angles of viewing, providing a cue for depth perception.

Depth Cue

Visual information that helps to understand the distance or depth of objects in a scene.

Born Blind

A condition where an individual lacks vision from birth due to genetic factors, developmental issues, or other causes.