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Assume that Costa Rica has leakages from its macroeconomy so that

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Assume that Costa Rica has leakages from it\'s
macroeconomy so that only 80% of every dollar spent
there is spent again there.
Assume also that Costa Rica has a potential GDP of $900
billion and an actual (equlibrium) GDP of only $750 billion.
What is the recessionary spending gap, or the proper
amount of spending \"medicine\" to inject to achieve full
employment under these conditions?
Solution
Spending Medicine=(Potential GDP-Actual
GDP)*100/80=(900-750)*100/80=$187.5b

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Assume that Costa Rica has leakages from it \'s macroeconomy so that only 80% of every dollar spent there is spent again there. Assume also that Costa Rica has a potential GDP of $900 billion and an actual (equlibrium) GDP of only $750 billion. What is the recessionary spending gap, or the proper am ...
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