If planned aggregate expenditure (PAE) in an economy equals 2000 + 0.8Y and potential output (Y*) equals 9000, then this economy has:Group of answer choicesa recessionary gap.No output gap.no autonomous expenditure.an expansionary gap.no induced expenditure.

If we assume that the planned aggregate expenditure is given by the equation PAE = 960 + 0.8Y so that exogenous expenditure equalled 960, with the multiplier of 5, the 10-unit drop in exogenous expenditure would result in a _____________ in short-run equilibrium output.

In an economy where planned aggregate spending is given by PAE = 5,500 + 0.6Y – 20,000r, the central bank is currently setting the interest rate at 0.05 (5 per cent). If potential output equals 11,750, the central bank must ____ the interest rate to close the ____________ gap.Group of answer choiceslower; expansionaryraise; expansionaryraise; contractionarylower; recessionarynot change; output

If the planned aggregate expenditure (PAE) is given by the equation PAE = [1010 –1000r] + 0.8Y and the real interest rate is 5%, what would be the short-run equilibrium output (PAE = Y)?Group of answer choicesY = 2347Y = 3600Y = 8687Y = 4800

Assume that planned aggregate expenditure is given by the equation: PAE = 150 + 0.5Y. What is the effect of a 5 unit increase in government expenditure on short-run equilibrium output?Group of answer choicesOutput increases by 10 unitsOutput increases by 5 unitsOutput increases by 0.5 unitsNo change in short-run equilibrium output

Consider a simple economy with no government or external sector. Assume that in this economy the consumption (and thus saving) plans of households are always realized. Assume for the current period this economy is characterized by the following data:Y = 2800, Cp = 1800 and Ip = 400where Y is output, Cd is consumption and Ip is planned investment. In this caseGroup of answer choicesoutput is at its equilibrium level but planned saving and planned investment are unequalaggregate planned expenditure is greater than outputtotal investment recorded in the national accounts would be 1000output is not at its equilibrium level and total investment will be smaller than planned investment.