Use the Following to Answer Questions

question 300

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. If actual output is 500 billion arcs, to restore the economy to potential output the government should _____ by 25 billion arcs.

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

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Definitions:

Fast Fashion

A business model in the apparel industry that focuses on rapidly producing high volumes of clothing to keep up with the latest fashion trends, often criticized for environmental and ethical issues.

Master License

A comprehensive license that grants the holder extensive rights to use, sell, or distribute a product or service, often in a specific geographic area.

Lease Departments

Spaces or areas within retail stores that are rented out to external vendors or concessionaires to sell their products.

Grocery Store

A retail store that primarily sells food, both fresh and packaged, as well as non-food household items.