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Suppose Full Employment Real GDP Is $12 Trillion, Current Real

Question 216

Multiple Choice

Suppose full employment real GDP is $12 trillion, current real GDP is $11 trillion, and the marginal propensity to consume is 0.8. The recessionary gap is


A) $0.2 trillion.
B) $0.5 trillion.
C) $0.8 trillion.
D) $1 trillion.

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