Economics:
10th Edition
ISBN: 9781285859460
Author: BOYES, William
Publisher: Cengage Learning
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Question
Chapter 10, Problem 5E
To determine
Draw a graph representing a hypothetical economy in a recession. Label the two axis, the 45 degree line, the AE curve, and the equilibrium level of the real GDP. Indicate and label the GDP gap and the recessionary gap
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Students have asked these similar questions
Suppose that exports increase by $300 billion, given an MPC of.75. Calculate the
change in GDP. Give your answer in billions and leave off the dollar sign. Be sure to
include a negative sign if appropriate.
Keynesian Cross
Suppose Y = C+ I + G
C = 900 +.75(Y)
I = 300
G = 400
a. Calculate the equilibrium GDP.
Name two macroeconomic variables that decline when the economy goes into a recession. Name one macroeconomic variable that rises during a recession.
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