Suppose full employment output equals $25 trillion and actual output equals $14 trillion. If crowding out is not an issue and the MPC equals 0.80, then government spending of ............will close the output gap. O $2.2 trillion $55 trillion $13.75 trillion $8.8 trillion.
Suppose full employment output equals $25 trillion and actual output equals $14 trillion. If crowding out is not an issue and the MPC equals 0.80, then government spending of ............will close the output gap. O $2.2 trillion $55 trillion $13.75 trillion $8.8 trillion.
Chapter11: Fiscal Policy
Section: Chapter Questions
Problem 1.4P
Related questions
Question
![Suppose full employment output equals $25 trillion and actual output equals $14 trillion. If crowding
out is not an issue and the MPC equals 0.80, then government spending of ..........will close the
output gap.
O $2.2 trillion
$55 trillion
$13.75 trillion
$8.8 trillion.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F652e7b54-5ab5-451c-b590-e88a05f16edf%2Fa8bcece1-5b58-4296-89e5-978be0ac652a%2Fc9g04h4_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Suppose full employment output equals $25 trillion and actual output equals $14 trillion. If crowding
out is not an issue and the MPC equals 0.80, then government spending of ..........will close the
output gap.
O $2.2 trillion
$55 trillion
$13.75 trillion
$8.8 trillion.
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
![ECON MACRO](https://www.bartleby.com/isbn_cover_images/9781337000529/9781337000529_smallCoverImage.gif)
![MACROECONOMICS](https://www.bartleby.com/isbn_cover_images/9781337794985/9781337794985_smallCoverImage.gif)
![Principles of Economics 2e](https://www.bartleby.com/isbn_cover_images/9781947172364/9781947172364_smallCoverImage.jpg)
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
![ECON MACRO](https://www.bartleby.com/isbn_cover_images/9781337000529/9781337000529_smallCoverImage.gif)
![MACROECONOMICS](https://www.bartleby.com/isbn_cover_images/9781337794985/9781337794985_smallCoverImage.gif)
![Principles of Economics 2e](https://www.bartleby.com/isbn_cover_images/9781947172364/9781947172364_smallCoverImage.jpg)
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax