When the country of Econoland is at full-employment, the level of output is $225 billion. Unfortunately...

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When the country of Econoland is at full-employment, the level of output is $225 billion. Unfortunately for Econolanders, the current level of output is $525 billion. The MPC in Econoland is .8: a. What is the current economic problem in Econoland? C. b. Draw a properly labeled graph for Econoland's macro-economy based on the information above. Based on this problem, should policy makers use an expansionary or contractionary fiscal policy to solve the problem? Show the appropriate shift on the graph based on the policy that was selected in part C. What is the size of the initial GDP gap? Using the data provided above (the bolded and underlined numbers), calculate the amount of government spending that would be required to return Econoland to full-employment. 8. Using the data provided above (the bolded and underlined numbers), calculate the amount of tax change that would be required to return Econoland to full-employment. h. What amount of government spending and tax would be required to return Econoland to full- employment if: i. 20% was changed with spending 80% was changed with a tax d. e. f. ii. When the country of Econoland is at full-employment, the level of output is $225 billion. Unfortunately for Econolanders, the current level of output is $525 billion. The MPC in Econoland is .8: a. What is the current economic problem in Econoland? C. b. Draw a properly labeled graph for Econoland's macro-economy based on the information above. Based on this problem, should policy makers use an expansionary or contractionary fiscal policy to solve the problem? Show the appropriate shift on the graph based on the policy that was selected in part C. What is the size of the initial GDP gap? Using the data provided above (the bolded and underlined numbers), calculate the amount of government spending that would be required to return Econoland to full-employment. 8. Using the data provided above (the bolded and underlined numbers), calculate the amount of tax change that would be required to return Econoland to full-employment. h. What amount of government spending and tax would be required to return Econoland to full- employment if: i. 20% was changed with spending 80% was changed with a tax d. e. f. ii.

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a The current economic problem in Econoland is that output is above fullemployment levels so Econola... View the full answer