Refer to Figure 12-4. Potential GDP equals $500 billion. The economy is currently producing GDP1 which is equal to $400 billion. If the MPC
Refer to Figure 12-4. Potential GDP equals $500 billion. The economy is currently producing GDP1 which is equal to $400 billion. If the MPC is 0.8, then how much must autonomous spending change for the economy to move to potential GDP? Figure 12-4 Real aggregate expenditure, AE (trillions of dollars) Y = AE AE AE, 0 45 Potential GDP GDP Real GDP, Y (trillions of dollars)
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