Suppose the price level is fixed, the mpc is 0.5, and the gdp gap is a negative $80 billion. to achieve full-employment output (exactly), government should

The government should increase spending by $40 million.

Explanation:

The MPC is given as 0.5.

The recessionary gap is $80 billion, this means to reach full employment level of output, the government needs to increase income by $80 billion.

Increase in GDP =

Increase in GDP = ΔG\ \times\

$80 billion = Δ

$80 billion = Δ

ΔG =

ΔG = $40 billion

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1. artillery

2. jose san martin

3.their economies remained dependent on outside powers.

4. drafted new economies

5. democracies have replaced dictatorships