Assume the following to answer the following questions: C= 1000+ .9 (Y-T) Tax rate = 0.1Y Imports = 0.1(Y-T) Government spending = 200 Investment = 300 Exports = 600 Potential Output = $8000What is the current GDP in this economy? Show your work.The economy described above is in the ? gap of the AD/AS Model.By how much must government spending increase or decrease to close this gap and bring the economy to Potential Output? Show your work

Assume the following to answer the following questions: C= 1000+ .9 (Y-T) Tax rate = 0.1Y Imports = 0.1(Y-T) Government spending = 200 Investment = 300 Exports = 600 Potential Output = $8000What is the current GDP in this economy? Show your work.The economy described above is in the ? gap of the AD/AS Model.By how much must government spending increase or decrease to close this gap and bring the economy to Potential Output? Show your work

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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