450 Total expenditure Col G(X-M), National income efer to the figure above. If the vertical distance labelled Z represents a deflationary gap then which of the following statements is true? Y1 represents the full employment level of output and total expenditure must be increased from C+1+G+(X-M) 1 to C++G+(X-M) 2 in order to increase a. output and employment. Y2 represents the full employment level of output and total expenditure must be reduced from C+l+G+(X-M) 2 to C+l+G+(X-M) 1 in order to increase outp b. and employment. Y1 represents the full employment level of output and total expenditure must be reduced from C+l+G+(X-M) 2 to C+l+G+(X-M) 1 in order to increase outp C. and employment. Y 2 represents the full employment level of output and total expenditure must be increased from C+I+G+(X-M) 1 to C+l+G+(X-M) 2 in order to increase O d. output and employment.

450 Total expenditure Col G(X-M), National income efer to the figure above. If the vertical distance labelled Z represents a deflationary gap then which of the following statements is true? Y1 represents the full employment level of output and total expenditure must be increased from C+1+G+(X-M) 1 to C++G+(X-M) 2 in order to increase a. output and employment. Y2 represents the full employment level of output and total expenditure must be reduced from C+l+G+(X-M) 2 to C+l+G+(X-M) 1 in order to increase outp b. and employment. Y1 represents the full employment level of output and total expenditure must be reduced from C+l+G+(X-M) 2 to C+l+G+(X-M) 1 in order to increase outp C. and employment. Y 2 represents the full employment level of output and total expenditure must be increased from C+I+G+(X-M) 1 to C+l+G+(X-M) 2 in order to increase O d. output and employment.

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter16: The Influence Of Monetary And Fiscal Policy On Aggregate Demand

Section: Chapter Questions

Problem 11PA

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