- Assume that $1200 represents full employment and that the spending multiplier is 4. 'Alr AE,...

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- Assume that $1200 represents full employment and that the spending multiplier is 4. Alr AE, t(5,49) (Carlanta), (Cathaton) 2 A recessionary gap of $50 billion exists when the conomy produces an income of $1000 billion a. The b. False it should be $

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Answer 1

Answer #1

Full employment =$1200 billion

When the economy produces an income of $1000 billion.

Then , there is a recessionary gap of $(1200-1000)billion= $200 billion.

Hence, option(B) is correct i.e it is FALSE that a recessionary gap of $50 billion exists when the economy produces an income of $1500 billion because there is a recessionary gap of $200 billion.

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Answer 2

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Suppose an economy can be represented by the following table, in which employment is in millions...

1. Equilibrium GDP can operate at, below, or above full employment GDP. True/False 2. Imports have...

1) The Economy cannot be considered fully employed unless the measured unemployment rate is below 1%....

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- Assume that $1200 represents full employment and that the spending multiplier is 4. 'Alr AE,...

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Add Answer to: - Assume that $1200 represents full employment and that the spending multiplier is 4. 'Alr AE,...

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Suppose an economy can be represented by the following table, in which employment is in millions...

1. Equilibrium GDP can operate at, below, or above full employment GDP. True/False 2. Imports have...

1) The Economy cannot be considered fully employed unless the measured unemployment rate is below 1%....

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Add Answer to:
- Assume that $1200 represents full employment and that the spending multiplier is 4. 'Alr AE,...