no explain is fine

Question 2 D Include correctly labeled diagrams, if useful or required, in explaining your answers. A correctly labeled diagram must have all axes and curves clearly labeled and must show directional changes. If the question prompts you to \"Calculate,\" you must show how you arrived at your nal answer. The economy of Newland is in short-run macroeconomic equilibrium. The current real output is $400 billion, and the full employment output is $500 billion. The marginal propensity to consume is 0.8. (a) Is the economy experiencing a recessionary output gap or an inationary output gap? Explain. (b) Assume Newland's government is considering taking action to close the output gap identied in part (a). (i) Calculate the minimum change and indicate the direction of change in government spending required to shift the aggregate demand curve to close the output gap. Show your work. (ii) If instead Newland's government changes taxes without changing govemrnent spending, calculate the minimum change and indicate the direction of change in taxes required to shift the aggregate demand curve to close the output gap. Show Eur work (c) Which scal policy action, changing government spending or changing taxes, is more effective in closing the output gap? Explain. (d) Assume instead Newland's government decides not to take any policy action. will short-run aggregate supply increase, decrease, or stay the same in the long run? Explain