2. The lowest level of the output gap during the Great Recession was -7.46% in July2009.(a) Economists estimate the multiplier for the US economy to be 1.5. If this is true,what is ?(b) What would the percent change in government expenditure be to close this gap,assuming monetary policy is not being used?

Output Gap: The output gap represents the difference between the actual level of real GDP in an…

2. The lowest level of the output gap during the Great Recession was -7.46% in July 2009. (a) Economists estimate the multiplier for the US economy to be 1.5. If this is true, what is x? (b) What would the percent change in government expenditure be to close this gap, assuming monetary policy is not being used?

2. The lowest level of the output gap during the Great Recession was -7.46% in July 2009. (a) Economists estimate the multiplier for the US economy to be 1.5. If this is true, what is x? (b) What would the percent change in government expenditure be to close this gap, assuming monetary policy is not being used?

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter18: Six Debates Over Macroeconomic Policy

Section: Chapter Questions

Problem 2QR

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