Question
Suppose that real GDP is currently $13.1 1 trillion and potential real GDP is$14.0 trillion, or a gap of $900 900 billion. The government purchases
Suppose that real GDP is currently $13.1
1 trillion and potential real GDP is$14.0 trillion, or a gap of $900
900 billion. The government purchases multiplierLOADING...
is 5.0
5.0, and the tax multiplier is 4.0
4.0.
Holding other factorsconstant, by how much will government purchases need to be increased to bring the economy to equilibrium at potentialGDP?
Government spending will need to be increased by $ _________?
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Environmental Economics
Authors: Barry Field, Martha K Field
5th Edition
0073375764, 9780073375762
