Question: C = $300 billion + 0.75 YD I = $300 billion Use this information to complete this problem: Identify the equilibrium rate of output (or

C = $300 billion + 0.75 YD

I = $300 billion

Use this information to complete this problem:

Identify the equilibrium rate of output (or GDP) .

If full-employment GDP equals $2500 billion ,what kind of Gap will develop (recessionary or Inflationary ) ? Explain clearly.

How much is the gap ?

What is the value of the multiplier?

What would happen to equilibrium GDP if the rate of investment increased to $350 from current $300 billion per year?

What will happen to Equilibrium GDP if Govt. takes a stimulus plan by increasing its spending by $50 billion ?

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