You are given the following information about the Aggregate Demand and Aggregate Supply in an economy of Gombakland. A. Assuming the full-employment level of GDP is $220 billion, identify and describe the type of macroeconomic problem currently faced by Gombakland. B. Given that the marginal propensity to consume (MPC) for Gombakland is 0.5, calculate the required change in government spending which would be most consistent with closing the GDP-gap. C. Then calculate the required change in taxation as an alternative policy to achieve the same result. Explain your answer 400 LRAS Price level (in $) AD . 300 250 200 $40 billion SRAS Recessionary Gap 100 100 180 200 220 300 Output level (in billion dollars) ANSWER TO A: The macroeconomic problem currently This is thed by Gombakland is a recessionary gap. indicated by the output level being, below up full employment level of GDP, which is 1220 billion ANSWER TO B (SHOW YOUR WORK): ANSWER TO C (SHOW YOUR WORK)