1. Calculate the MPC in the above diagram. 2. Based on Diagram 1, If private Investment of $100 is added to the existing C, calculate the new equilibrium level of NI. 3. Given your answer to the previous question (question #2) calculate by how much G should change, if the full employment level in the economy is at $3000.
1. Calculate the MPC in the above diagram. 2. Based on Diagram 1, If private Investment of $100 is added to the existing C, calculate the new equilibrium level of NI. 3. Given your answer to the previous question (question #2) calculate by how much G should change, if the full employment level in the economy is at $3000.
Chapter9: Demand-side Equilibrium: Unemployment Or Inflation?
Section9.A: The Simple Algebra Of Income Determination And The Multiplier
Problem 4TY
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Answer all four questions based on the following diagram.
1. Calculate the MPC in the above diagram.
2. Based on Diagram 1, If private Investment of $100 is added to the existing C, calculate the new equilibrium level of NI.
3. Given your answer to the previous question (question #2) calculate by how much G should change, if the full employment level in the economy is at $3000.
4. Based on the answer to the previous question (question #3), if half of those government expenditures are financed through lump sum taxes, calculate the new level if NI? (C+I+G)
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