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vitfil [10]
3 years ago
11

An economy is operating with output $400 billion below its natural level, and fiscal policymakers want to close this recessionar

y gap. the central bank agrees to adjust the money supply to hold the interest rate constant, so there is no crowding out. the marginal propensity to consume is , and the price level is completely fixed in the short run. to close the recessionary gap, the government would need to spending by $ billion.
Business
1 answer:
Anit [1.1K]3 years ago
4 0

To close the recessionary gap, the government need to increase spending by 80 Billion Dollars. If the central bank agrees to adjust the money supply to hold the interest rate constant, so there is no crowding out. the marginal propensity to consume is 4/5 , and the price level is completely fixed in the short run.

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When vendors and/or purchasers have different knowledge about a certain component of a product's quality, this is referred to as adverse selection. Thus, those who work in hazardous environments or lead high-risk lives are more likely to buy life or disability insurance, knowing that they will likely be able to use it.

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loris [4]

<u>line</u>

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Afina-wow [57]
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Answer:

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