Calculate the real GDP in this country. (Need help with all) 3. The table below provides data on the spending on final goods, in billions of dollars, byconsumers, businesses, and the government in equilibrium in a country with nointernational trade.Aggregate VariablesConsumption spendingInvestment spendingGovernment spendingTransfer paymentsValue (in billions of dollars) in the base year$900$400$200$60The marginal propensity to save is equal to 0.2 and there are no exports or imports.(a) Calculate the real GDP in this country. Show your work.(b) Calculate the marginal propensity to consume. Show your work.(c) Suppose that the government increases spending from $200 billion to $300 billion.(i) Calculate the maximum change in real GDP. Show your work.(d) Suppose that taxes decrease by $100 billion. Will the maximum change in real GDP belarger than, smaller than, or equal to the change in real GDP identified in part (c)(i)? Explain.

1. Real GDP = consumption spending + investment + Government spending = 900 + 400 + 200 = 1500 $…

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Calculate the real GDP in this country. (Need help with all)

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter14: A Macroeconomic Theory Of The Open Economy

Section: Chapter Questions

Problem 7PA

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Question

Calculate the real GDP in this country. (Need help with all)

3. The table below provides data on the spending on final goods, in billions of dollars, by
consumers, businesses, and the government in equilibrium in a country with no
international trade.
Aggregate Variables
Consumption spending
Investment spending
Government spending
Transfer payments
Value (in billions of dollars) in the base year
$900
$400
$200
$60
The marginal propensity to save is equal to 0.2 and there are no exports or imports.
(a) Calculate the real GDP in this country. Show your work.
(b) Calculate the marginal propensity to consume. Show your work.
(c) Suppose that the government increases spending from $200 billion to $300 billion.
(i) Calculate the maximum change in real GDP. Show your work.
(d) Suppose that taxes decrease by $100 billion. Will the maximum change in real GDP be
larger than, smaller than, or equal to the change in real GDP identified in part (c)(i)? Explain.

Definition Video Definition Overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period. Video

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