Suppose potential GDP equals $500 billion (shown by the vertical line passing through L and N. The economy is currently producing GDP1=$450 billion. If the MPC is 0.8, then how much must autonomous spending change for the economy to move to potential GDP? Show your work. (6 marks) Suppose the rest of the world is experiencing an economic boom. Use the AE model to illustrate the impact of this on the Canadian economy. (3 marks) You must use a graph in your explanation to answer the following question. True/False? "If an economy is currently experiencing a budget deficit and an inflationary gap, then a balanced budget fiscal policy will be pro-cyclical." Explain your choice. (5 marks) You must use a graph in your explanation to answer the following question. True/False? "A counter cyclical fiscal policy raises GDP but leaves prices unchanged if used to eliminate a recessionary gap