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question for macroeconimics 41 Suppose that AD and A5 for a hypothetical economy are as shown in the following table) MPC is 0.8. Amount of

question for macroeconimics

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41 Suppose that AD and A5 for a hypothetical economy are as shown in the following table) MPC is 0.8. Amount of real domestic _ Amount of real domestic output demanded Price level output supplied (in billions] (price index) [in billions} 300 300 700 400 250 600 500 200 500 600 150 400 700 100 300 a. In SR, this economy's equilibrium price level is and equilibrium real output is _____ b. Suppose this country's GDP at natural rate of unemployment is $4003. Is this country in the recessionary gap or in the inationary gap? _ c. Sup pose Government decided to change its purchases to eliminate the above ga p, Government should _______ spending by ________ billion. Which curve will government's action change? _ Is this an expansionary or contractionary scal policy? _ d_ Is the resulting equilibrium level of real domestic output the absolute fullcapacity real output?_ If not, explain why

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