Suppose That Real GDP Is $1,300, Potential GDP Is $1,800

question 368

Essay

Suppose that real GDP is $1,300, potential GDP is $1,800, and the marginal propensity to consume is 0.6. If the government is going to close the gap by changing government purchases of goods and services and imposes no taxes, what specific fiscal policy action should policy makers take?

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Definitions:

Continuous-Yes Close

A sales technique that involves asking a series of questions designed to get the customer to keep saying yes, building towards agreement on the final sale.

Price

The value or worth of a product.

Value

The importance, worth, or usefulness of something, often considered in terms of what a product or service offers in relation to its price.

Sales Negotiations

The process of discussing terms and conditions of a sale to reach a mutually acceptable agreement.