If the MPC is 0.80 and the equilibrium GDP is $20 billion below the full-employment GDP, then the size of the recessionary expenditure gap isGroup of answer choices$16 billion.$10 billion.$4 billion.$20 billion.

If the economy's MPC is 0.75, a tax decrease of $6.67 billion would correct a recessionary gap of $ billion.

Suppose that the level of GDP increased by $400 billion in a private closed economy where the marginal propensity to consume is 0.60. Aggregate expenditures must have increased byGroup of answer choices$160 billion.$400 billion.$80 billion.$240 billion.

Consider a closed economy with national saving of $2 trillion, consumption of $16 trillion, and government purchases of $5 trillion. What the economy's is GDP?

The economy of Morin is shown in the figure below.  a. If potential GDP (LAS) is $525, and the economy is presently in equilibrium, then there is a(n) gap of $ billion. b. In order to close this gap aggregate demand must increase by $ billion. c. If every $1 change in government spending leads to a $4 change in aggregate demand, government spending must increase by $ billion. d. Suppose that initially government had a balanced budget. If government increases its spending as in part (c) and tax revenues are 0.2 of real GDP, what will be the government’s real budget surplus/deficit at full-employment equilibrium? The government budget would have a of $ billion.

If mpc = 0.75, a decrease from 700 to 660 billion n government spending, will decrease GDP byGroup of answer choices40 billion10 billion160 billion20 billion