You are given the following information about aggregate demand at the existing price level for an economy: (1) consumption = $400 billion, (2) investment = $40 billion, (3) government purchases = $90 billion, and (4) net exports = $25 billion. If the full-employment level of GDP for this economy is $600 billion, then what combination of actions would be most consistent with closing the GDP-gap here?
A. A decrease in government purchases and an increase in taxes
B. An increase in government purchases and a decrease in taxes
C. An increase in government purchases and taxes
D. A decrease in government purchases and taxes
Answer: B
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A. decrease; downward B. increase; upward C. decrease; upward D. increase; downward
The U-shaped yield curve in the figure above indicates that short-term interest rates are expected to
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A. extraneous B. external C. internal D. intrinsic
The weekly demand for Kelewele among the 2019 cohort of BSc Admin students at the UGBS is
Based on the demand function above, is Kelewele a normal good or an inferior good? Explain your answer.