Draw a graph to illustrate the desired aggregate expenditures of an economy whose participants have the following spending plans: C = $10+ 0.8Y I = $20 G = $30 X-M = $10 (a) What is the value of equilibrium output? (b) Assuming that the full-employment level of output is $300, what kind of gap exists and how large is it? Identify the gap on the graph.

Draw a graph to illustrate the desired aggregate expenditures of an economy whose participants have the following spending plans: C = $10+ 0.8Y I = $20 G = $30 X-M = $10 (a) What is the value of equilibrium output? (b) Assuming that the full-employment level of output is $300, what kind of gap exists and how large is it? Identify the gap on the graph.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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