Answer'Multilier=1/(1-MPC)
=1/(1-0.6)
=2.5
the multiplier is 2.5
the change in GDP because of exports=multiplier*change in
exports
=2.5*(-100)
=$-250
The Change in real GDP will be $-250
means the GDP decreases by $250
The marginal propensity to consume (MPC) is 0.60 The multiplier is 25 (Round your answer to...
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10.) An economy has a marginal propensity to consume and Y* , income-expenditure equilibrium GDP, equals $500 billion. Given an autonomous increase in plannėd investment of $10 billion, show the rounds of increased spending that take place by completing the accompanying table. The first and second rows are filled in for you. In the first row the increase of planned investment spending of $10 billion raises real GDP and YD by $10 billion, leading to an increase in consumer spending...
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