When there is an inflationary gap: a. Real output exceeds the ...

[xroflmao]

When there is an inflationary gap:
 a. Real output exceeds the natural level of real output.
  b. Real output equals the natural level of real output.
 c. Real output is less than the natural level of real output.
  d. Any of the above is possible.

Question 2

Calculate the government spending multiplier if, an increase in government spending by 5 million increases real GDP by 25 million.
 a. 0.2
  b. 0.5
  c. 2
  d. 5
  e. 6

[chinwesucks]

Answer to Question 1

b

Answer to Question 2

d