Refer to Table 9 If the Full-Employment Level of Income (Y_F)in Table 9

question 137

Multiple Choice

Refer to Table 9.2.(Data are expressed in billions of dollars. ) Table 9.2
$\begin{array}{|r|r|r|c|c|}\hline \begin{array}{r}\text { Full Employment } \\\text { Income (Output) }\end{array} & \begin{array}{c}\text { Consumers } \\\text { Desire to Spend }\end{array} & \begin{array}{c}\text { Investors Desire } \\\text { to Spend }\end{array} & \begin{array}{c}\text { Total Private } \\\text { Spending }\end{array} & \begin{array}{c}\text { Total } \\\text { Saving }\end{array} \\\hline \$ 500 & \$ 300 & \$ 250 & \$ & \$ \\\hline 600 & 375 & 250 & \$ & \$ \\\hline 700 & 450 & 250 & \$ & \$ \\\hline 800 & 525 & 250 & \$ & \$ \\\hline\end{array}$
If the full-employment level of income (Y_F) in Table 9.2 is $700 billion,

• A)The economy is in equilibrium.
• B)There is a recessionary gap of $250 billion.
• C)There is an inflationary gap of $450 billion.
• D)There is an inflationary gap of $700 billion.