What is the recessionary spending gap

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Reference no: EM13837734

Assume that Costa Rica has leakages from its macro economy so that only 80% of every dollar spent there is spent again there.

Assume also that Costa Rica has a potential GDP of $900 billion and an actual (equlibrium) GDP of only $750 billion.

What is the recessionary spending gap, or the proper amount of spending "medicine" to inject to achieve full employment under these conditions?

Reference no: EM13837734

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