Question 8 (7.5 points) ) Listen It is assumed that everything else stays constant. The economy has Consumption $190, Investment spending $80, Government expenditure on goods and services $80, Tax revenues $80, Exports $30, Imports $30. And marginal propensity to consume is assumed to be 0. When the potential output of the economy (or long run output) is $280, what should be government spending in order to close an output gap? Your Answer: Answer Question 9 (5 points) ) Listen The economy is in long run equilibrium. Congress's passage of new laws significantly increasing the regulation of business. It is assumed that everything else stays constant. What do we expect in aggregate demand, short run aggregate supply and long run aggregate supply in short run? Explain what happens to short run equilibrium price level and output. And what happens in long run, and long run equilibrium price level and output? Explain your answer using aggregate demand and aggregate supply. Format BI UVA + v