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QUESTION
. What fiscal policy would you recommend to eliminate the inflationary or recessionary gap in the following scenarios?
. What fiscal policy would you recommend to eliminate the inflationary or recessionary gap in the following scenarios? You must show your calculations to get full credit. a. Recessionary gap of $800 with a marginal propensity to consume of 0.5 (3 pts) b. Inflationary gap of $1,500 with a marginal propensity to consume of 0.8. (3 pts) c. Potential GDP is $10,200, real GDP is $9,000, and the marginal propensity to consume is 0.2
What fiscal policy would you recommend to eliminate the inflationary or recessionary gap in the following scenarios? You must show your calculations to get full credit.a. Recessionary gap of $800...