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f. How much the tax cut must be to make the same increase in aggregate demand to close the recessionary gap? Question #4 Consider
f. How much the tax cut must be to make the same increase in aggregate demand to close the recessionary gap? Question #4 Consider the following Macro model GDP Y=C+GI+GP+NX C=120+0.80Yd G.I=80 G.P=60 T=100 Yd=Y-T NX=-20 1. What is the initial equilibrium level of GDP for the above macro model? 2. If Government spending increases by $5, calculate the new equilibrium level of GDP for the same macro model?
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