Author Question: Assume that a GDP gap can be closed by a 200 initial change in planned spending. The MPS is 0.3 and ... (Read 17 times)

Jramos095 · **on:** Jun 30, 2018

Assume that a GDP gap can be closed by a 200 initial change in planned spending. The MPS is 0.3 and the MPI equals 0.1 . If the economy is currently in equilibrium with an income level of 600, potential GDP equals:
a. 1,600.
b. 1,100.
c. 800.
d. 600.
e. 400.

Question 2

When quantity demanded increases at every possible price, the demand curve
a. shifts to the left.
b. shifts to the right.
c. there is a movement along the given demand curve.
d. none of the above.