. 0 The country has a total population of 79 million. The labour force in the country amounts to 47 million people. The

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0 The Country Has A Total Population Of 79 Million The Labour Force In The Country Amounts To 47 Million People The 1 (150.45 KiB) Viewed 47 times

. 0 The country has a total population of 79 million. The labour force in the country amounts to 47 million people. The current unemployment rate is 3.95%. The natural rate of unemployment is 4.2%. The marginal propensity to consume is 0.75. • The current reserve ratio, which is applicable to all banks, is 6%. All banks tend to hold excess reserves of 3%. The current GDP deflator is 117. The current level of the consumer price index is 109. The intercept of the consumption function is 5200. The level of government expenditure is 6000. Potential GDP is at 43,000. Fixed taxes are at 3000. • The economy is a closed economy. The level of investment is 2500. • Transfer payments are at 3000. Use government expenditure as your policy tool. How much would you need to change government expenditure to fix the GDP gap in this economy? In order to fix the GDP gap, government expenditure needs to be raised by 700. . . In order to fix the GDP gap, government expenditure needs to be lowered by 700. In order to fix the GDP gap, government expenditure needs to be lowered by 1400.