(Table: Keynesian Equilibrium Analysis with Taxes and Net Exports) Given the data in the table, if full employment income is $1,000 while the current equilibrium is $750, a(n) _____ gap exists, such that a(n) _____ in spending equal to _____ is needed to close the gap.
A) inflationary; decrease; $100
B) inflationary; decrease; $250
C) recessionary; increase; $100
D) recessionary; increase; $250

Question

(Table: Keynesian Equilibrium Analysis with Taxes and Net Exports) Given the data in the table, if full employment income is $1,000 while the current equilibrium is $750, a(n) _____ gap exists, such that a(n) _____ in spending equal to _____ is needed to close the gap. 
A) inflationary; decrease; $100 
B) inflationary; decrease; $250 
C) recessionary; increase; $100 
D) recessionary; increase; $250

Quizplus · Accepted Answer

The Answer of (Table: Keynesian Equilibrium Analysis with Taxes and Net Exports) Given the data in the table, if full employment income is $1,000 while the current equilibrium is $750, a(n) _____ gap exists, such that a(n) _____ in spending equal to _____ is needed to close the gap. 
A) inflationary; decrease; $100 
B) inflationary; decrease; $250 
C) recessionary; increase; $100 
D) recessionary; increase; $250