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Suppose that the government purchases multiplier equals 2. Real GDP is $14 trillion and potential real GDP is $14.5 trillion. Which of the following is

Suppose that the government purchases multiplier equals 2. Real GDP is $14 trillion and potential real GDP is $14.5 trillion.

Which of the following is true about this economy?

Answer: has a recessionary output gap It has an expansionary output gap

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