The following graph shows the planned expenditure line (AE) for an economy where current equilibrium income is $400 billion and full-employment income is $650 billion. (? 800 45-degree line 700 PE 600 PE 500 400 300 200 100 Full-Employment Income 100 200 300 400 500 600 700 800 INCOME (Billions of dollars) The economy is experiencing v with the absolute value of the gap equal to $ billion. Closing the income gap would require a $ billion in government spending. Thus the value of the multiplier for this economy is REAL EXPENDIT URE (Billions of dollars)
The following graph shows the planned expenditure line (AE) for an economy where current equilibrium income is $400 billion and full-employment income is $650 billion. (? 800 45-degree line 700 PE 600 PE 500 400 300 200 100 Full-Employment Income 100 200 300 400 500 600 700 800 INCOME (Billions of dollars) The economy is experiencing v with the absolute value of the gap equal to $ billion. Closing the income gap would require a $ billion in government spending. Thus the value of the multiplier for this economy is REAL EXPENDIT URE (Billions of dollars)
Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter7: Production And Growth
Section: Chapter Questions
Problem 5CQQ
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