What is the size of the gdp gap

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Reference no: EM13771423

If equilibrium national income is 3,500 billion while the national income and output (GDP) necessary for full employment is 3,900 billion (assuming an MPC of 0.6) then

a) What is the size of the GDP gap?

b) What size change in government spending would eliminate the GDP gap?

Reference no: EM13771423

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