Aggregate Supply and Demand; Fiscal Policy Assi...

$(1)$

Saved

Real Output $($quantity in billions per year$)$

Instructions: Enter your response as a whole numbed

Suppose the economy is at full$-$employment when $AS=A{D}_2.$

a$.$ The GDP gap when the demand curve is at $A{D}_1$ is $ $$ billion.

b$.$ Is the economy in a recession or expansion?

The multiplier process depicted in the following table is based on an MPC of $0\mathrm{.}75.$

Instructions: Round your responses to two decimal places.

o$.$ Recompute the first four cycles using an MPC of $0\mathrm{.}88$

$\backslash$table$[[,$MPC $=0\mathrm{.}75,$MPC $=0\mathrm{.}88$