Refer to Table 2.3. Increasing the number of workers from 2 to 3 will increase output per day by

Assume that full-employment real GDP is Y = $1,200 billion, the current equilibrium real GDP is Y = $1,600 billion, and the MPC = 0.8 . In order to bring the economy to a full-employment real GDP,

a. a recessionary gap must be bridged by increasing aggregate expenditures by $80 billion. b. an inflationary gap must be bridged by cutting aggregate expenditures by $80 billion. c. nothing is needed to bring the economy into full employment equilibrium. d. a recessionary gap must be bridged by increasing aggregate expenditures by $400 billion. e. an inflationary gap must be bridged by cutting aggregate expenditures by $400 billion.

What does it mean to have an absolute advantage in the production of two goods?

What will be an ideal response?