An economy is described by the following equations C=300+0.5 (Y-T) T=100 = 50 G 100 NX = 50 Y* = 1000 What policy should the government implement to eliminate the output gap (for Y=Y*) Buy bonds O Increase T Decrease G by 60 O Increase G by 60 O Decrease T by 100

An economy is described by the following equations C=300+0.5 (Y-T) T=100 = 50 G 100 NX = 50 Y* = 1000 What policy should the government implement to eliminate the output gap (for Y=Y*) Buy bonds O Increase T Decrease G by 60 O Increase G by 60 O Decrease T by 100

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter18: Six Debates Over Macroeconomic Policy

Section: Chapter Questions

Problem 2CQQ

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please answer in text form and in proper format answer with must explanation , calculation for each part and steps clearly

An economy is described by the following equations
C=300+0.5 (Y-T) T=100 = 50 G 100 NX = 50
Y* = 1000
What policy should the government implement to eliminate the output gap (for Y=Y*)
Buy bonds
O Increase T
Decrease G by 60
O Increase G by 60
O Decrease T by 100

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