The economy of Morin is shown in the figure below. The Economy of Morin AD AS 170- 150- 130- 110- 90 - 70 460 (480. 80) 500 520 480 540 560 580 600 Real GDP a. If potential GDP (LAS) is $580, and the economy is presently in equilibrium, then there is a(n) [(Click to select) ♥ gap of o. In order to close this gap aggregate demand must increase by $ [ |billion. E. If every $1 change in government spending leads to a $4 change in aggregate demand, government spending must ]billion. d. Suppose that initially government had a balanced budget. If government increases its spending as in part (c) and tax 0.25 of real GDP, what will be the government's real budget surplus/deficit at full-employment equilibrium? The government budget would have a (Click to select) ♥ of $ [ |billion. Price Level
The economy of Morin is shown in the figure below. The Economy of Morin AD AS 170- 150- 130- 110- 90 - 70 460 (480. 80) 500 520 480 540 560 580 600 Real GDP a. If potential GDP (LAS) is $580, and the economy is presently in equilibrium, then there is a(n) [(Click to select) ♥ gap of o. In order to close this gap aggregate demand must increase by $ [ |billion. E. If every $1 change in government spending leads to a $4 change in aggregate demand, government spending must ]billion. d. Suppose that initially government had a balanced budget. If government increases its spending as in part (c) and tax 0.25 of real GDP, what will be the government's real budget surplus/deficit at full-employment equilibrium? The government budget would have a (Click to select) ♥ of $ [ |billion. Price Level
Chapter9: Demand-side Equilibrium: Unemployment Or Inflation?
Section9.A: The Simple Algebra Of Income Determination And The Multiplier
Problem 4TY
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*Options for a) are: recessionary or inflationary
*Options for d) are: deficit or surplus
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