Assume That Potential GDP Is $200 Billion and the Multiplier

question 42

Multiple Choice

Assume that potential GDP is $200 billion and the multiplier equals 5.The recessionary gap is $10 billion.What is the actual level of equilibrium income?

• A)$200 billion
• B)$150 billion
• C)$100 billion
• D)$80 billion
• E)$50 billion

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