By how much would aggregate expenditures in column change

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Reference no: EM13245410

Employment - Real Domestic Output - Aggregate Expenditures (C+G+Ig+Xn)

90-500-520

100-550-560

110-600-600

120-650-640

130-700-680

Referring to the above table:

a) If full employment in this economy is 130 million, will there be an inflationary or a recessionary expenditure gap? What will be the consequences of this gap? By how much would aggregate expenditures in column 3 have to change at each level of GDP to eliminate the gap? Explain.
What is the Multiplier?

b) Will there be an inflationary, or a recessionary, gap if the full-employment level of output is $500 billion? What would be the consequences of this gap?

Reference no: EM13245410

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