Answered: ve for the following: 1. The Marginal…

ve for the following: 1. The Marginal Propensity to Consume (MPC) 2. The Marginal Propensity to Import (MPM) 3. The Open-Economy Multipli

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Solve for the following:

1. The Marginal Propensity to Consume (MPC)

2. The Marginal Propensity to Import (MPM)

3. The Open-Economy Multiplier

4. The increase in equilibrium output corresponding to an increase in investment by 500

An
open-economy is characterized by the following:
C = 300 +0.7(Y – T)
I = 150
G = 75
T = 75
X = 400
M = 0.3Y

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