The total expenditure in Macroland begins with these initial levels (in trillions of dollars): GDP = 10; autonomous consumption=D1, Investment = 2; Government = 2; Net Exports = 0 and T=2. Assume MPC was 0.75 but suddenly and as a result of a shock to consumer sentiments decreases to 0.7. find the change in the equilibrium level of income. O4 3 O 2

MACROECONOMICS
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ISBN:9781337794985
Author:Baumol
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Chapter9: Demand-side Equilibrium: Unemployment Or Inflation?
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The total expenditure in Macroland begins with these initial levels (in trillions of dollars): GDP = 10;
autonomous consumption=1, Investment = 2; Government = 2; Net Exports = 0 and T=2. Assume MPC
%3D
was 0.75 but suddenly and as a result of a shock to consumer sentiments decreases to 0.7. find the change
in the equilibrium level of income.
4
None of the answers.
Transcribed Image Text:The total expenditure in Macroland begins with these initial levels (in trillions of dollars): GDP = 10; autonomous consumption=1, Investment = 2; Government = 2; Net Exports = 0 and T=2. Assume MPC %3D was 0.75 but suddenly and as a result of a shock to consumer sentiments decreases to 0.7. find the change in the equilibrium level of income. 4 None of the answers.
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