Table 23-12 -Refer to Table 23-12. Using the Table Above, Answer the Table

question 88

Essay

Table 23-12

-Refer to Table 23-12. Using the table above, answer the following questions. The numbers in the table are in billions of dollars.
a. What is the equilibrium level of real GDP?
b. What is the MPC?
c. If potential GDP is $7,000 billion, is the economy at full employment? If not, what is the condition of the economy?
d. If the economy is not at full employment, by how much should government spending increase so that the economy can move to the full employment level of GDP?

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Definitions:

Supply And Demand

Fundamental economic principle that describes how the availability of goods (supply) and the desire for them (demand) determine their price.

Acreage Allotment Program

A governmental policy aimed at controlling crop production by limiting the acres that can be cultivated, historically used in the US to support agricultural prices.

Taxpayer-Subsidized

Financial support provided by the government to individuals or organizations, funded by taxpayers.

Price-Support Program

Government policies designed to maintain the price of a commodity at a certain level through subsidies or purchase of the market surplus.