Our Canadian government has determined that the economy is in equilibrium in the Keynesian Range of the Short Run Aggregate Supply curve at $1.70 trillion and full employment GDP is $2.20 trillion. In addition, the expenditure multiplier is 4.0.

Our Canadian government has determined that the economy is in equilibrium in the Keynesian Range of the Short Run Aggregate Supply curve at $1.70 trillion and full employment GDP is $2.20 trillion. In addition, the expenditure multiplier is 4.0. What type of gap is Canada's economy experiencing? Odepressionary Oinflationary/expansionary Oreflationary Ocontractionary/recessionary What must happen to federal government expenditures (G) to eliminate Canada's gap? Oapply Ralph Klein School of Economic policy Oincrease Odecrease Ono change By how much (Strillion) must government expenditures (G) change to eliminate Canada's gap? O0 00.10 O0.125 00.50 What type of fiscal policy would the government be employing in this situation? Ocontractionary ORalph Klein School of Economic policy Oexpansionary OTrump supply side Economic policy What will happen to Canada's Price level if the new equilibrium remains in the Keynesian range? Odecrease Ono change Oincrease Ounknown