What kind of output gap does this economy have how large is


Consider an economy characterized in part by the following functions:

C = 200 + 0.8Yd

AE = 600 + 0.75Y

Ye = 2400

Y* = 2240

Prices are fixed

A. What kind of output gap does this economy have? How large is this gap?

B. If the government wants to close the gap by changing autonomous taxes only, what should be the size and the direction of the change in T°? SHOW YOUR WORK

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Business Economics: What kind of output gap does this economy have how large is
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