Multiple Choice
Assume that full-employment real GDP is Y = $1,200 billion, the current equilibrium real GDP is Y = $800 billion, and the MPC is 0.50. What level of aggregate expenditures will close the recessionary gap?
A) $50 billion.
B) $80 billion.
C) $140 billion.
D) $200 billion.
E) $400 billion.
Correct Answer:
Verified
Correct Answer:
Verified
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