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Question: Use the information in the following table to answer the following questions.
Draw a graph by using the numbers from the above table. Carefully label the two axes, the 45-degree line (potential GDP), the AE curve, and the equilibrium level of real GDP. If the potential real GDP is $750, and the economy is in a recession. Show the GDP gap and recessionary gap in the graph.
Y
C
I
G
X
$100
$120
$20
$30
-$10
$300
$500
$480
-$30
$700
$660
-$50
a) What is the value of autonomous consumption?
FOR B & C (if the potential real GDP is $750)
b) What is the GDP gap?
c) What is the recessionary gap?
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