Question 65 An article published in an economics journal found the following: "For the poorest households, the marginal propensity to consume was close to 70%. For the richest households, the MPC was only 35% Assume that the macroeconomy can be divided into three groups. Group A consists of the poorest households, Group B consists of the richest households, and Group C consists of all other households. Assume that there is an increase in planned investment of $40 billion. Compute the change in equilibrium real GDP if the MPC for the economy is 35 percent (or 0.35). S513 billion $114.29 billion O $54.00 billion $61.54 billion

Question 65 An article published in an economics journal found the following: "For the poorest households, the marginal propensity to consume was close to 70%. For the richest households, the MPC was only 35% Assume that the macroeconomy can be divided into three groups. Group A consists of the poorest households, Group B consists of the richest households, and Group C consists of all other households. Assume that there is an increase in planned investment of $40 billion. Compute the change in equilibrium real GDP if the MPC for the economy is 35 percent (or 0.35). S513 billion $114.29 billion O $54.00 billion $61.54 billion

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter9: Demand-side Equilibrium: Unemployment Or Inflation?

Section9.A: The Simple Algebra Of Income Determination And The Multiplier

Problem 4TY

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