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The Figure Given Below Depicts Macroeconomic Equilibrium in a Closed

Question 125

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The figure given below depicts macroeconomic equilibrium in a closed economy. Assume that the spending multiplier in this economy is 1.5.?Figure 10.5
The figure given below depicts macroeconomic equilibrium in a closed economy. Assume that the spending multiplier in this economy is 1.5.?Figure 10.5 -Refer to Figure 10.5. Suppose that the economy is characterized by an equilibrium real GDP level of $900 that exceeds the potential real GDP level by $600. This so-called expansionary gap can be closed by: A) increasing planned aggregate expenditures by $400. B) lowering government purchases by $600. C) lowering autonomous consumption spending by $400. D) increasing planned aggregate expenditures by $900. E) lowering autonomous net exports by $600.
-Refer to Figure 10.5. Suppose that the economy is characterized by an equilibrium real GDP level of $900 that exceeds the potential real GDP level by $600. This so-called expansionary gap can be closed by:


A) increasing planned aggregate expenditures by $400.
B) lowering government purchases by $600.
C) lowering autonomous consumption spending by $400.
D) increasing planned aggregate expenditures by $900.
E) lowering autonomous net exports by $600.

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