Refer to Figure 11.1. Assume aggregate demand is represented by AD1 and full employment output is $6.0 trillion. The economy confronts a real GDP gap of:
A. $200 billion.
B. $400 billion.
C. $200 billion ´ MPC.
D. $400 billion ´ MPC.
Refer to Figure 11.1. Assume aggregate demand is initially represented by AD1 and full employment output is $6.0 trillion. If aggregate demand increases by the amount of the GDP gap, equilibrium will occur at:
A. Point b.
B. Point d.
C. Point e.
D. Point c.