Consider an economy described by the following set of equations: c = 120 + 0.08Y I = 320 G = 480 X - IM = -80 T = 400 a. Find the actual level of GDP. b. If full employment comes at Y = 1000, would there be a recessionary gap or an inflationary gap? c. What spending changes will be necessary to eliminate this gap? d. What amount of tax changes will be necessary to eliminate this gap? e. What are some policy actions that can be taken?

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