a. If potential GDP (LAS) is $550, and the economy is presently in equilibrium, then there is a(n) [recessionary gap of $ b. In order to close this gap aggregate demand must increase by $ billion. wwwwwwwwww billion. c. If every $1 change in government spending leads to a $4 change in aggregate demand, government spending must increase by $ billion.
a. If potential GDP (LAS) is $550, and the economy is presently in equilibrium, then there is a(n) [recessionary gap of $ b. In order to close this gap aggregate demand must increase by $ billion. wwwwwwwwww billion. c. If every $1 change in government spending leads to a $4 change in aggregate demand, government spending must increase by $ billion.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The Economy of Morin a. If potential GDP (LAS) is $550, and the economy is presently in equilibrium, then
there is a(n) gap of $ billion. b. In order to close this gapagregate demand must increase by $ billion. c. If
every $1 change in government spending leads to a $4 change in aggregate demand, government
spending must increase by $ billion.
Price Level
170
150
130
110
90
70
The Economy of Morin
460 480 500
520 54 535,750 580 600
Real GDP
AD
AS
g
Ć
a. If potential GDP (LAS) is $550, and the economy is presently in equilibrium, then there is a(n) [recessionary
b. In order to close this gap aggregate demand must increase by $
**********
gap of $3
billion.
..........
billion.
c. If every $1 change in government spending leads to a change in aggregate demand, government spending must increase by $
billion.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F53acc78f-a6cc-4cab-bafb-b7d306ac6afc%2F9ccee2c1-f730-4236-a926-44f9b3741409%2F3qtpnd_processed.jpeg&w=3840&q=75)
Transcribed Image Text:es
The Economy of Morin a. If potential GDP (LAS) is $550, and the economy is presently in equilibrium, then
there is a(n) gap of $ billion. b. In order to close this gapagregate demand must increase by $ billion. c. If
every $1 change in government spending leads to a $4 change in aggregate demand, government
spending must increase by $ billion.
Price Level
170
150
130
110
90
70
The Economy of Morin
460 480 500
520 54 535,750 580 600
Real GDP
AD
AS
g
Ć
a. If potential GDP (LAS) is $550, and the economy is presently in equilibrium, then there is a(n) [recessionary
b. In order to close this gap aggregate demand must increase by $
**********
gap of $3
billion.
..........
billion.
c. If every $1 change in government spending leads to a change in aggregate demand, government spending must increase by $
billion.
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