Assume an economy has automatic stabilizers in place that include a progressive tax structure and a transfer payment system. Then in a period of economic recession with high unemployment, we would expect:

Group of answer choices

government spending on social security benefits to fall.

average tax rates and welfare payments to decline.

the national debt to become smaller.

average tax rates and government revenues to rise.

tax revenues to fall and unemployment compensation to rise.

If Oscar's MPC is 0.95 and he earns an additional $2,000, how much would he save?

Group of answer choices

$100

$1,900

$2,105

$40,000

The GDP gap is:

Group of answer choices

the product of the potential real GDP and the equilibrium level of real GDP.

the distance between the current level of real gross domestic product and full employment real GDP.

the difference between potential real GDP and the actual equilibrium level of real GDP.

the difference between the present value of all of government's projected financial obligations and the present value of all projected future tax and other receipts.

the difference between the actual output of an economy and its potential output.