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Part B i Saved The economy of Morin is shown in the figure below. The Economy of Morin AD AS 170 150 130 Price Level 110 90 70 460 480 500 520 540 560 580 600 Real GDP a. If potential GDP (LAS) Is $560, and the economy is presently in equilibrium, then there is a(n) [(Click to select) v gap of $ billion. b. In order to close this gap aggregate demand must increase by $ billion. c. If every $1 change in government spending leads to a $4 change in aggregate demand, government spending must increase by $ billion. d. Suppose that Initially government had a balanced budget. If government increases its spending as in part (c) and tax revenues are 0.25 of real GDP, what will be the government's real budget surplus/deficit at full-employment equilibrium? The government budget would have a [(Click to select) ~ of $ billion