Table 12-14
-Refer to Table 12-14.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 $4,000 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?
Definitions:
Formal Rationality
A decision-making process focused on efficiency, predictability, calculability, and dehumanization, often associated with bureaucratic organizations.
Industrial Era
A period in history characterized by significant technological advancements and the rise of industrial production from the late 18th to the early 20th century.
Bureaucracy
An organizational structure characterized by hierarchical authority, rigid division of labor, written rules, and impersonal relationships, primarily in governmental and large institutional settings.
Rational-legal Authority
A form of leadership in which authority is largely tied to legal rationality, legal legitimacy, and bureaucracy.
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