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The following graph C+G+X represents a partial Keynesian economy ($ trillion). If in this economy I=1.0, answer the following questions: What is the equilibrium GDP
The following graph C+G+X represents a partial Keynesian economy ($ trillion).
If in this economy I=1.0, answer the following questions:
What is the equilibrium GDP (GDPe)
4
5
6
8
The expenditure multiplier is
2.5
3.0
1.5
2.0
If full employment GDP (GDPf) = 5 what type of gap is the economy experiencing?
recessionary
stationary
inflationary
Alberta Advantage
To eliminate the gap above, government expenditures (G) must
decrease by 1.0
decrease by 0.5
increase by 0.5
increase by 1.0
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