The following graph shows the total expenditure line (TE) for an economy where current equilibrium output is $350 billion and potential output is $600 billion.

The economy is experiencing _________ (a contractionary gap, an inflationary gap) equal to $______ billion. To close the output gap, government purchases could _______ (increase, decrease) by _____ ($50, 150, 75) billion. Thus, the value of the multiplier for this economy is ___________ (0.7143, 0.5833, 0.4167, 1.6667, 0.6).

The following graph shows the total expenditure line (7') for an economy where current equilibrium output is $350 billion and potential output is $600 billion. (? 700 45-degree line 600 TE 500 TE 400 REAL EXPENDITURE (Billions of dollars) 300 200 100 Potential GDP 0 10 100 200 300 400 500 600 700 REAL GDP (Billions of dollars) The economy is experiencing equal to $ billion. To close the output gap, government purchases could by billion. Thus, the value of the multiplier for this economy is On the previous graph, shift the TE line to show the change in total expenditure necessary to close the output gap. Note: Select and drag the curve to the desired position. The curve will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther.700 45-degree line 800 TE 500 TE 400 REAL EXPENDITURE (Billions of dollars) 300 200 100 Potential GDP 0 100 200 300 400 500 600 700 REAL GDP (Billions of dollars)