Suppose the Economy Is Operating at an Output Level of $5,400

question 110

Multiple Choice

Suppose 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:

Top-Down Change

The change initiatives come from senior management.

Strategic Changes

Refers to major decisions and actions taken by an organization to achieve its long-term goals and adapt to external changes.

Organisational Targets

Specific goals or objectives that a company or organization aims to achieve in a set period.

Marketplace Conditions

The various factors influencing the environment in which businesses operate, including competition, customer preferences, and economic trends.