Refer to the table below in answering the questions that follow.

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(1)(2)(3)

PossiblelevelsRealDomesticOutputAggregateExpenditures

ofEmployment(billions)(C+ I + G )

(millions)(billions)

9$500$520

10550560

11600600

12650640

13700680

a)Iffull employment in this economy is 13 million, will there be an inflationary or a recessionary expenditure

gap?

b)Whatwill be the consequence of this gap?

c)Byhow much would aggregate expenditures in column 3 have to change at each level of GDP to

eliminatethe inflationary or the recessionary gap?

d)Whatare the sizes of the marginal propensity to consume (MPC)?, the marginal propensity to save

(MPS)?

e)Whatis the size of the multiplier in this example?