=+6. In each of the following cases, either a recessionary or inflationary gap exists. Assume that the

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=+6. In each of the following cases, either a recessionary or inflationary gap exists. ‘Assume that the aggregate supply curve is horizontal, so that the change in real GDP arising from a shift of the aggregate demand curve equals the size of the shift of the curve. Calculate both the change in government purchases of goods and services and the change in government transfers necessary to close the gap.

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Economics

ISBN: 9781319066604

5th Edition

Authors: Robin Krugman, Paul Wells

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