Assume the following to answer the following questions: C= 1000+ .9 (Y-T) Tax rate = 0.1Y...

 

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Assume the following to answer the following questions: C= 1000+ .9 (Y-T) Tax rate = 0.1Y Imports = 0.1(Y-T) Government spending = 200 Investment = 300 Exports = 600 Potential Output = $8000 Question 1 Question 2 What is the current GDP in this economy? Show your work. The economy described above is in th [Select] the AD/AS Model. recessionary inflationary gap of Question 3 8 pts By how much must government spending increase or decrease to close this gap and bring the economy to Potential Output? Show your work Assume the following to answer the following questions: C= 1000+ .9 (Y-T) Tax rate = 0.1Y Imports = 0.1(Y-T) Government spending = 200 Investment = 300 Exports = 600 Potential Output = $8000 Question 1 Question 2 What is the current GDP in this economy? Show your work. The economy described above is in th [Select] the AD/AS Model. recessionary inflationary gap of Question 3 8 pts By how much must government spending increase or decrease to close this gap and bring the economy to Potential Output? Show your work

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Lets solve each question step by step Question 1 Current GDP Calculation The formula for GDP in this ... View the full answer