Question: Complete the aggregate expenditures (AE) column of the table below and answer the questions that follow:: YCIGAE $100$200$60$40 2002506040 3003006040 4003506040 5004006040 6004506040 7005006040 8005506040

Complete the aggregate expenditures (AE) column of the table below and answer the questions that follow::

YCIGAE

$100$200$60$40

2002506040

3003006040

4003506040

5004006040

6004506040

7005006040

8005506040

a)After completing the AE column, draw the 45-degree line and the AE line (3 marks)

b)On your graph, indicate the equilibrium level of income by the letter Y (1 mark)

c)What is the marginal propensity to consume (MPC) for this economy?

(1 mark)

d)If the full employment level for this economy is $700, what is the size of the recessionary

gap? $__________ (2 marks)

e)By how much should the government increase its spending to close the recessionary gap?

(3 marks) ___________________________________________________Show your calculations

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