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If Planned Aggregate Expenditure (PAE)in an Economy Equals 1,000

Question 124

Multiple Choice

If planned aggregate expenditure (PAE) in an economy equals 1,000 + 0.9Y and potential output (Y*) equals 9,000, then this economy has:

A) an expansionary gap.
B) a recessionary gap.
C) no output gap.
D) no autonomous expenditure.

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