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Refer to the table below in answering the questions that follow. (1) (2) (3) Possible levels Real Domestic Output Aggregate Expenditures of Employment (billions) (C

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Refer to the table below in answering the questions that follow. (1) (2) (3) Possible levels Real Domestic Output Aggregate Expenditures of Employment (billions) (C + | + G ) _(millions) (billions) 9 $500 $520 10 550 560 11 600 600 12 650 640 13 700 680 a) If full employment in this economy is 13 million, will there be an inationary or a recessionary expenditure gap? (2 marks) b) What will be the consequence of this gap? (2 marks) c) By how much would aggregate expenditures in column 3 have to change at each level of GDP to eliminate the inflationary or the recessionary gap? (2 marks) d) What are the sizes of the marginal propensity to consume (MPG)? . the marginal propensity to save (MP8)? (2 marks) 9) What is the size of the multiplier in this example? (2 marks)

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