The table below shows the aggregate equilibrium for the country of Microtania. Aggregate Data Year Microtania Potential Aggregate Output Current Aggregate Output Price Level 2014 2015 in billions 400 500 In 2014, Microtania experienced a ORecessionary gap OInflationary gap in billions 350 80 450 87 OPotential equilibrium What would be an appropriate action for the government of Microtania to take? ORaise taxes OIncrease government spending ONothing

Principles of Economics 2e
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ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter19: The Macroeconomic Perspective
Section: Chapter Questions
Problem 4SCQ: Without looking at Table 19.7, return to Figure 19.10. If we define a recession as a significant...
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The table below shows the aggregate equilibrium for the country of Microtania.
Aggregate Data
Year
Microtania
Potential Aggregate Output Current Aggregate Output Price Level
2014
2015
in billions
400
500
In 2014, Microtania experienced a
ORecessionary gap
OInflationary gap
in billions
350
80
450
87
OPotential equilibrium
What would be an appropriate action for the government of Microtania to take?
ORaise taxes
OIncrease government spending
ONothing
Transcribed Image Text:The table below shows the aggregate equilibrium for the country of Microtania. Aggregate Data Year Microtania Potential Aggregate Output Current Aggregate Output Price Level 2014 2015 in billions 400 500 In 2014, Microtania experienced a ORecessionary gap OInflationary gap in billions 350 80 450 87 OPotential equilibrium What would be an appropriate action for the government of Microtania to take? ORaise taxes OIncrease government spending ONothing
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