The Keynesian Cross 4. Expenditure gaps The following graph shows the planned expenditure line (AE) for an economy where current equilibrium income is $300 billion and full-employment income is $600 billion. (?) 700 45-degree line O- 600 PE 500 PE 400 REAL EXPENDITURE (Billions of dollars) 300 200 100 Full-Employment Income 100 200 300 400 500 600 700 INCOME (Billions of dollars) The economy is experiencing a recessionary gap with the absolute value of the gap equal to $ billion. Closing the income gap would require a $ billion in government spending. Thus the value of the multiplier for this economy is On the graph, shift the PE line to show the change in the planned expenditure line necessary to close the income gap