Suppose That the Economy Is Operating at an Output Level

question 65

Multiple Choice

Suppose that the economy is operating at an output level of $5 400 billion.Assume furthermore that potential output is $5 000 billion and the marginal propensity to consume is 0.75._____ would close this inflationary gap.

• A) A $400 billion tax hike
• B) Raising government purchases of goods and services by $400 billion
• C) Decreasing government purchases of goods and services by $100 billion
• D) Increasing government purchases of goods and services by $100 billion

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Definitions:

Multiculturalism Framework

An approach that recognizes, values, and promotes the diversity of cultures within a community or society, advocating for equal respect and rights.

Ideological Challenge

The act of questioning or confronting established beliefs, values, or ideologies.

Model Minority Stereotype

A stereotype that characterizes a particular minority group as being more successful or well-behaved than other minority groups, often simplifying complex realities.

Racist Comments

Statements or remarks that demean or express prejudice against people based on their race or ethnicity.