Refer to the accompanying table in answering the questions that follow: (1) (2) (3) Real Domestic...

  

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Refer to the accompanying table in answering the questions that follow: (1) (2) (3) Real Domestic Output, Aggregate Expenditures (Ca + lg + Xn + G), Possible Levels of Employment, Millions Billions Billions 90 $450 $470 100 500 510 110 550 550 120 600 590 130 650 630 a. If full employment in this economy is 130 million, will there be an inflationary expenditure gap or a recessionary expenditure gap? Recessionary expenditure gap By how much would aggregate expenditures in column 3 have to change at each level of GDP to eliminate the inflationary expenditure gap or the recessionary expenditure gap? Aggregate expenditures would have to (Click to select) by: billion. What is the multiplier in this example? b. Will there be an inflationary expenditure gap or a recessionary expenditure gap if the full-employment level of output is $450 billion? Inflationary expenditure gap By how much would aggregate expenditures in column 3 have to change at each level of GDP to eliminate the gap? Aggregate expenditures would have to decrease by: billion. What is the multiplier in this example? C. Assuming that investment, net exports, and government expenditures do not change with changes in real GDP, what are the sizes of the MPC, the MPS, and the multiplier? Instructions: Round your answers for MPC and MPS to 1 decimal place. MPC= MPS= Multiplier= 00 Refer to the accompanying table in answering the questions that follow: (1) (2) (3) Real Domestic Output, Aggregate Expenditures (Ca + lg + Xn + G), Possible Levels of Employment, Millions Billions Billions 90 $450 $470 100 500 510 110 550 550 120 600 590 130 650 630 a. If full employment in this economy is 130 million, will there be an inflationary expenditure gap or a recessionary expenditure gap? Recessionary expenditure gap By how much would aggregate expenditures in column 3 have to change at each level of GDP to eliminate the inflationary expenditure gap or the recessionary expenditure gap? Aggregate expenditures would have to (Click to select) by: billion. What is the multiplier in this example? b. Will there be an inflationary expenditure gap or a recessionary expenditure gap if the full-employment level of output is $450 billion? Inflationary expenditure gap By how much would aggregate expenditures in column 3 have to change at each level of GDP to eliminate the gap? Aggregate expenditures would have to decrease by: billion. What is the multiplier in this example? C. Assuming that investment, net exports, and government expenditures do not change with changes in real GDP, what are the sizes of the MPC, the MPS, and the multiplier? Instructions: Round your answers for MPC and MPS to 1 decimal place. MPC= MPS= Multiplier= 00

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complete solution is given below We have a recessionary gap when the aggregate expenditure made in a... View the full answer