The economys current level of equilibrium GDP is $780 billion. The full-employment level of GDP is $800

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The economy’s current level of equilibrium GDP is $780 billion.

The full-employment level of GDP is $800 billion. The multiplier is 4. Given those facts, we know that _______ the economy faces ________ expenditure gap of __________.

a. an inflationary; $5 billion

b. an inflationary; $10 billion

c. an inflationary; $20 billion

d. a recessionary; $5 billion

e. a recessionary; $10 billion

f. a recessionary; $20 billion

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Macroeconomics

ISBN: 9781264112456

22nd Edition

Authors: Campbell McConnell, Stanley Brue, Sean Flynn

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Question Posted: Mar 02, 2024 01:00 PM

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The economys current level of equilibrium GDP is $780 billion. The full-employment level of GDP is $800

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To determine the type of expenditure gap and its magnitude we can use the formula ExpenditureGap Mul...View the full answer

Macroeconomics

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