EBK MACROECONOMICS
EBK MACROECONOMICS
5th Edition
ISBN: 8220106773925
Author: KRUGMAN
Publisher: MAC HIGHER
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Chapter 13, Problem 17P
To determine

Concept Introduction:

Marginal Propensity to Consume ( MPC ): It overall raise is that proportion of amount which the consumer pay for consumption of goods and services, and it does not include the savings of the consumer.

Inflationary gap: At the level of full employment, if the value of the real GDP is greater than the value of potential GDP, it leads to emergence of inflationary gap.

Recessionary gap: At the level of full employment, if the value of the potential GDP is greater than the value of real GDP, it leads to emergence of recessionary gap.

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