Assume that full-employment gdp is pound500 billion and


Assume that full-employment GDP is £500 billion and that current GDP is £450 billion. Assume also that the mpcd is 4/5.

(a) Is there an inflationary or deflationary gap?

(b) What is the size of this gap?

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Macroeconomics: Assume that full-employment gdp is pound500 billion and
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