Macroeconomics 20th Edition by Campbell McConnell,Stanley Brue,Sean Flynn

Exercise 2

The economy's current level of equilibrium GDP is $780 billion. The full employment level of GDP is $800 billion. The multiplier is 4. Given those facts, we know the economy faces_______ expenditure gap of __________
a. An inflationary; $5 billion.
b. An inflationary; $10 billion.
c. An inflationary; $20 billion.
d. A recessionary; $5 billion.
e. A recessionary; $10 billion.
f. A recessionary; $20 billion.