2. In a given economy potential GDP is at $2,000,000. If equilibrium/actual GDP is $1,300,000, determine how large of a recessionary gap this economy has. If the MPC is .8,
2. In a given economy potential GDP is at $2,000,000. If equilibrium/actual GDP is $1,300,000, determine how large of a recessionary gap this economy has. If the MPC is .8,
Chapter1: Making Economics Decisions
Section: Chapter Questions
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![2. In a given economy potential GDP is at
$2,000,000. If equilibrium/actual GDP is
$1,300,000, determine how large of a
recessionary gap this economy has. If the MPC is
.8,
solve for how much investment spending alone
will have to change to close this gap.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fdfb8c355-c7f5-4d58-be91-34f49393af2c%2F94384461-b0dd-45b9-ab66-abded8a1842c%2Fy1yx5d_processed.jpeg&w=3840&q=75)
Transcribed Image Text:2. In a given economy potential GDP is at
$2,000,000. If equilibrium/actual GDP is
$1,300,000, determine how large of a
recessionary gap this economy has. If the MPC is
.8,
solve for how much investment spending alone
will have to change to close this gap.
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