Congratulations again. You’ve just been appointed economic adviser to the president of Examland. The mpe is...
Congratulations again. You’ve just been appointed economic adviser to the president of Examland. The mpe is 0.9; autonomous investment is $950; autonomous government spending is $7,700; autonomous consumption is $10,500; and autonomous net exports are $850.
a. What is the equilibrium level of income in the country?
b. Autonomous net exports increase by $2,100. What will happen
to income?
c. You’ve just learned the mpe changed from 0.9 to 0.6.
How will this information change your answers in a and
b?
Homework Answers
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