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The economy’s current level of equilibrium gdp is $780 billion. the full-employment level of gdp is $800 billion. the multiplier is 4. given those facts, we know that the economy faces ___________ expenditure gap of ________. a recessionary; $5 billion an inflationary; $20 billion a recessionary; $10 billion a recessionary; $20 billion an inflationary; $5 billion an inflationary; $10 billion

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Answer:

The correct answer is "a recessionary; $5 billion"

Explanation:

The multiplier effect tells us that for every unit that varies the GDP, it will be affected by 4 units concerning the level of full employment of the GDP. Given that the current level of equilibrium GDP is less than the full employment level of GDP, this indicates that the economy is in recession for a recessive expenditure of $5 billion.

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