The figure given below represents the leakages and injections of an economy.
Figure 10.6

-Refer to Figure 10.6. If 0L represents potential GDP, the GDP gap can be closed by increasing autonomous expenditures by an amount equal to line segment _____.

Question

The figure given below represents the leakages and injections of an economy.
Figure 10.6
 
-Refer to Figure 10.6. If 0L represents potential GDP, the GDP gap can be closed by increasing autonomous expenditures by an amount equal to line segment _____.

Quizplus · Accepted Answer

The GDP gap can be closed by increasing autonomous expenditures by an amount equal to line segment NM, as this represents the necessary increase in spending to shift the aggregate demand curve to the right, closing the gap between actual and potential GDP.

The Figure Given Below Represents the Leakages and Injections of an Economy