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Consider the following diagram, in which the current short-run equilibrium is at point A. At point A, the economy has a recessionary gap LRAS SRAS
Consider the following diagram, in which the current short-run equilibrium is at point A. At point A, the economy has a recessionary gap LRAS SRAS If the marginal propensity to save equals 0.10, calculate the change in government spending that could eliminate the gap. $ trillion. ( Round your answer to two decimal places.) 120 ............ Price Level 115 A 111 22 22.5 23 AD 40- 0 Real GDP per Year ($ trillion)
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