The aggregate demand and supply for Cancum are shown in the table below. Potential GDP (LAS) is $900 billion. Aggregate Quantity Demanded Aggregate Quantity Supplied Price Index 105 1,000 200 110 900 400 115 800 550 120 700 700 125 600 800 130 500 900 135 400 1,000 140 300 1,050 a. If the economy is in equilibrium, it experiencing a(n) (Click to select) v gap of $ b. Suppose government uses countercyclical fiscal policy to close the gap. In order to achieve full employment AD would have to (Click to select) v by $ %. Round your answer to 2 decimal places. C. As a result of this change, the inflation rate would be

The aggregate demand and supply for Cancum are shown in the table below. Potential GDP (LAS) is $900 billion. Aggregate Quantity Demanded Aggregate Quantity Supplied Price Index 105 1,000 200 110 900 400 115 800 550 120 700 700 125 600 800 130 500 900 135 400 1,000 140 300 1,050 a. If the economy is in equilibrium, it experiencing a(n) (Click to select) v gap of $ b. Suppose government uses countercyclical fiscal policy to close the gap. In order to achieve full employment AD would have to (Click to select) v by $ %. Round your answer to 2 decimal places. C. As a result of this change, the inflation rate would be

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter5: Introduction To Macroeconomics

Section: Chapter Questions

Problem 3.3P

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