Use the information in the following table to answer the questions below. Assume you are dealing with short-run aspects of the economy, so the marginal propensity to consume is constant. Also, for simplicity, assume this economy has no taxes. In your answers, expain brifly how did you get the numerical result.Real GDPConsumptionPlannedInvestmentGovernmentPurchasesNet Exports$9,000$7,800$1,500$1,000-$700$10,000$8,600$1,500$1,000-$700$11,000$9,400$1,500$1,000-$700$12,000$10,200$1,500$1,000-$700$13,000$11,000$1,500$1,000-$700$14,000$11,800$1,500$1,000-$700Suppose net export increases by $400 (Assuming MPC, Gevernment Purchases, and Planned Investment are the same). What will be the new equilibrium level of GDP? Consumption?

Aggregate expenditure is a sum of consumption, planned investment, government purchases and net…

Answered: Use the information in the following…

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter9: Demand-side Equilibrium: Unemployment Or Inflation?

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Use the information in the following table to answer the questions below. Assume you are dealing with short-run aspects of the economy, so the marginal propensity to consume is constant. Also, for simplicity, assume this economy has no taxes. In your answers, expain brifly how did you get the numerical result.

Real GDP	Consumption	Planned Investment	Government Purchases	Net Exports
$9,000	$7,800	$1,500	$1,000	-$700
$10,000	$8,600	$1,500	$1,000	-$700
$11,000	$9,400	$1,500	$1,000	-$700
$12,000	$10,200	$1,500	$1,000	-$700
$13,000	$11,000	$1,500	$1,000	-$700
$14,000	$11,800	$1,500	$1,000	-$700

Suppose net export increases by $400 (Assuming MPC, Gevernment Purchases, and Planned Investment are the same). What will be the new equilibrium level of GDP? Consumption?

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