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Consider the following diagram, in which the current short-run equilibrium is at point A. LRAS S At point A, the economy has a recessionary gap

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Consider the following diagram, in which the current short-run equilibrium is at point A. LRAS S At point A, the economy has a recessionary gap If the marginal propensity to save equals 0.25, calculate the change in government spending that could eliminate the gap. $ trillion. (Round your answer to two decimal 120 places.) Price Level 115 A 111 :22 :22.5 23 AD 40 Real GDP per Year ($ trillion)

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