Suppose the economy is in a recession. The output gap is $1 trillion. The AE function reads AE = 0.5 +0.8Y. By how much should the government cut taxes to bring the economy to its full potential? Answer in trillions USD up to two decimal points, for example if the answer is $100 billion you should type 0.10
Suppose the economy is in a recession. The output gap is $1 trillion. The AE function reads AE = 0.5 +0.8Y. By how much should the government cut taxes to bring the economy to its full potential? Answer in trillions USD up to two decimal points, for example if the answer is $100 billion you should type 0.10
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Suppose the economy is in a recession. The output gap is $1 trillion. The AE function reads AE = 0.5 + 0.8Y. By how much should the government cut taxes to bring
the economy to its full potential? Answer in trillions USD up to two decimal points, for example if the answer is $100 billion you should type 0.10
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Transcribed Image Text:5:43 PM Fri Mar 17
:3
Answered
ASDE.85
Answered
ASDE.93
Answered
ASDE.98
X Answered
Question 4
Unanswered 2 attempts left
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0 attempts left ●
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0 attempts left
☎ 57%
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Suppose the economy is in a recession. The output gap is $1 trillion. The AE function reads AE = 0.5 + 0.8Y. By how much should the government cut taxes to bring
the economy to its full potential? Answer in trillions USD up to two decimal points, for example if the answer is $100 billion you should type 0.10
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