QUESTION 8 Assume potential GDP is 3,500 and actual GDP is 3,050. If the consumption function is C=400+0.2Yd , how much does government expenditure need to rise by to close the output gap? (Please input the round number without any Euro symbol)

QUESTION 8 Assume potential GDP is 3,500 and actual GDP is 3,050. If the consumption function is C=400+0.2Yd , how much does government expenditure need to rise by to close the output gap? (Please input the round number without any Euro symbol)

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter9: Demand-side Equilibrium: Unemployment Or Inflation?

Section: Chapter Questions

Problem 6TY

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