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The Figure Given Below Depicts Macroeconomic Equilibrium in a Closed

Question 89

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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.Assume that there is a recessionary gap that can be closed by a $500 increase in planned aggregate expenditures.If the economy is initially in equilibrium with a real GDP level of $900, then the target or potential level of real GDP must be: A) $333.33. B) $400. C) $750. D) $1, 400. E) $1, 650. Refer to Figure 10.5.Assume that there is a recessionary gap that can be closed by a $500 increase in planned aggregate expenditures.If the economy is initially in equilibrium with a real GDP level of $900, then the target or potential level of real GDP must be:


A) $333.33.
B) $400.
C) $750.
D) $1, 400.
E) $1, 650.

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