Suppose Real GDP Is $12

question 104

Multiple Choice

Suppose real GDP is $12.1 trillion and potential GDP is $12.6 trillion.To move the economy back to potential GDP,Congress should

• A)lower taxes by an amount less than $500 billion.
• B)raise government purchases by $500 billion.
• C)raise government purchases by more than $500 billion.
• D)lower taxes by $500 billion.
• E)lower government purchases by $500 billion.

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Definitions:

Industrial Countries

Nations that are characterized by a high level of industrialization, technological advancement, and a relatively high standard of living.

Birth Rates

The number of live births per thousand of the population per year.

Economic Development

The process by which a nation improves the economic, political, and social well-being of its people.

Industrial Revolution

A period of major industrialization that took place during the late 1700s and early 1800s, marked by significant technological advancements and changes in manufacturing processes.