a. By how much will GDP change if firms increase their investment by $11 billion and the MPC is 0.8? Instructions: Round your answers to the nearest whole number. The change in GDP $ billion. b. If the MPC is 0.5? The change in GDP $ billion.
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- Answer the following questions: Instructions: Enter your answers rounded to the nearest whole number. a. By how much will GDP change if firms increase their investment by $8 billion and the MPC is 0.90? $ billion...? b. If the MPC is 0.75? $ billion...?Real GDP Consumption Planned Investment Government Purchases Net Exports $5,000 $4,500 $500 $325 -125 6,000 5,300 $500 $325 -125 7,000 6,100 $500 $325 -125 8,000 6,900 $500 $325 -125 3 A Answer the questions based on the table below. The values are in millions of dollars. What is the equilibrium level of real GDP? What is the MPC? If potential GDP is $7,000 million, is the economy at full employment? If not, what is the condition of the economy? If the economy is not at full employment, by how much should government spending increase so that the economy can move to the full employment level of GDP?A $300 million decrease in investment spending will increase real GDP by more than $300 million. Is this a true statement? What is the relationship between investment spending and the GDP? I think that investment spending goes directly into the economy so I believe the answer to be true. But I am not sure.
- Level of investment goes up by 200. What happens with the level of GDP if you know that MPC = 0,8 and net tax rate = 0.1?a. What is the value of the MPC?b. WhatisthevalueoftheMPS?c. What is the value of the multiplier?d. What is the amount of unplanned investment at aggregate output of 300, 900, and 1,300?Suppose that disposable income, consumptio, and saving in some country are $ 200 billion, $ 150 billion, and $ 50 billion respectively. Next, assume that disposobal income increase by $ 20 billion, consumption rises by $ 18 billion, and saving goes up by $ 2 billion. a) What is the economy's MPC? What is its MPS? Instructions: Round your answers to 1 decimal place. b) What was the APC before the increase in disposable income? Instructions: Round your answer to 2 decimal places. What was the APC after the increase. ( round your answer to 3 decimal places).
- Refer to the figure at right. The equilibrium level of real GDP will occur A. at point A. B. to the left of point A. C. to the right of point A. D. at the undetermined point on the graph depending upon the level of investment.Which of the following statements is most accurate? a.Most of the variation in consumption spending can be explained by changes in debt b. There is no single factor that explains much of the variation in consumption spending c. Most of the variation in consumption spending can be explained by changes in the interest rate. d. Most of the variation in consumption spending can be explained by changes in wealth e. most of the variation in consumption spending can be explained by changes in disposable income.The ratio of the change in GDP to an initialchange in aggregate expenditures (AE) is thea. spending multiplier.b. permanent income rate.c. marginal expenditure rate.d. marginal propensity to consume.
- Suppose that an initial $10 billion increase in investment spending expands GDP by $10 billion in the first round of the multiplier process. Also suppose that GDP and consumption both rise by $6 billion in the second round of the process. what is the MPC? What is the size of the Multiplier? If, instead, GDP and consumption both rose by $8 billion in the second round, what would have been the size of the multiplier?Suppose that the initial 10 billion increase in the investment spending expands GDP by 10 billion in the first round of multiplier process. If GDP and consumption both rise by 6 billion in the second round of the process, what is the MPC in this economy? What is the size of the multiplier? If instead, GP and consumption both Rose by 8 billion in the second round, what would’ve been the size of the multiplier? Use the graph to answer the questions that follow. a.What is the value of the MPC?b.What is the value of the MPS?c.What is the value of the multiplier?d.What is the amount of unplanned investment at aggregateoutput of 300, 900, and 1,300?