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If the MPC is 0.5 and the equilibrium GDP is $100 billion below the full-employment GDP, then the size of the recessionary expenditure gap is

If the MPC is 0.5 and the equilibrium GDP is $100 billion below the full-employment GDP, then the size of the recessionary expenditure gap is

Multiple Choice

  • $50 billion.
  • $100 billion.
  • $25 billion.
  • $200 billion.

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