20

please do both please 1. Let full employment GDP be 800 billion dollars. Let PAE = 200 + .75Y . What should the government do to achieve equilibrium between PAE and full employment GDP? decrese government spending by 25 billion cut taxes by 50 billion nothing because the economy is in equilbrium increase government spending by 25 billion 2. The US dollar weakens against other currencies. As a result imports fall and GDP falls all else constant both imports and exports rise and GDP remains unchanged exports fall and GDP falls all else constant exports rise and GDP rises all else constant