You Are Given the Following Information About Aggregate Demand at the Existing

question 19

Multiple Choice

You are given the following information about aggregate demand at the existing price level for an economy: (1) consumption = $500 billion; (2) investment = $50 billion; (3) government purchases = $100 billion; and (4) net export = $20 billion.If the full-employment level of GDP for this economy is $620 billion, then what combination of actions would be most consistent with the goal of achieving price level stability?

• A)increase government spending and taxes
• B)decrease government spending and taxes
• C)decrease government spending and increase taxes
• D)increase government spending and decrease taxes

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Definitions:

Collective Representations

Shared beliefs, values, and meanings that are created by and exist independently of individual members of a society.

Rituals

Prescribed sequences of activities or ceremonies, often with symbolic meanings, that are practiced by a community or religious group.

Language

A system of communication using symbols, sounds, or gestures that are used by members of a community to interact and convey ideas.

Social Facts

Aspects of social life that influence an individual's actions and attitudes, according to Emile Durkheim, including laws, morals, beliefs, and customs.