Use the Following to Answer Questions

question 160

Multiple Choice

Use the following to answer questions :
Scenario: Fiscal Policy
Consider the economy of Arcadia. Its households spend 75% of increases in their income. There are no taxes and no foreign trade. Its currency is the arc. Potential output is 600 billion arcs.
-(Scenario: Fiscal Policy) Look at the scenario Fiscal Policy. Suppose that actual output is 700 billion arcs, and the government of Arcadia decides to tax its citizens. To bring the economy to potential output, the government should:

• A)increase taxes by 33.33 billion arcs.
• B)increase taxes by 3.33 billion arcs.
• C)keep taxes at zero.
• D)increase both taxes and government spending by 0.33 billion arcs.

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Definitions:

FDA Black Box Warning

The strongest warning by the U.S. Food and Drug Administration indicating that a medication carries a significant risk of serious or even life-threatening adverse effects.

Suicidal Symptoms

Signs that an individual is thinking about, planning, or has a high risk of attempting suicide, including expressing feelings of hopelessness or taking risks that could lead to death.

Antidepressant Medications

Medications prescribed to alleviate symptoms of depression by adjusting chemical imbalances in the brain, such as SSRIs and SNRIs.