If Equilibrium GDP Is $500 Billion Greater Than Full Employment

question 329

Multiple Choice

If equilibrium GDP is $500 billion greater than full employment GDP and the multiplier is 2.5,there is an inflationary gap of

• A)$100 billion.
• B)$200 billion.
• C)$250 billion.
• D)$500 billion.
• E)This is impossible to find with the information given.

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