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Refer to Table 9 If the Full-Employment Level of Income (YF)in Table 9

Question 88

Multiple Choice

Refer to Table 9.2.(Data are expressed in billions of dollars. ) Table 9.2
 Full Employment  Income (Output)   Consumers  Desire to Spend  Investors Desire  to Spend  Total Private  Spending  Total  Saving $500$300$250$$600375250$$700450250$$800525250$$\begin{array}{|r|r|r|c|c|}\hline \begin{array}{r}\text { Full Employment } \\\text { Income (Output) }\end{array} & \begin{array}{c}\text { Consumers } \\\text { Desire to Spend }\end{array} & \begin{array}{c}\text { Investors Desire } \\\text { to Spend }\end{array} & \begin{array}{c}\text { Total Private } \\\text { Spending }\end{array} & \begin{array}{c}\text { Total } \\\text { Saving }\end{array} \\\hline \$ 500 & \$ 300 & \$ 250 & \$ & \$ \\\hline 600 & 375 & 250 & \$ & \$ \\\hline 700 & 450 & 250 & \$ & \$ \\\hline 800 & 525 & 250 & \$ & \$ \\\hline\end{array}
If the full-employment level of income (YF) in Table 9.2 is $800 billion,


A) The economy is in equilibrium.
B) There is a recessionary gap of $25 billion.
C) There is an inflationary gap of $250 billion.
D) There is a recessionary gap of $275 billion.

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