Question

Investment Problem: 1. Assume the MPC is 3/4, if investment spending increase by $50 billion, the level of GDP will: 2.   Assume the MPC is 2/3, if investment spending decreases by $30 billion, the level of GDP will: Export Problem: 3. If the multiplier in an economy is 4, a $50 billion increase in exports will: 4. If the multiplier in an economy is 3,a $30 billion decrease in exports will: Balanced Budget Problem: 5. If the MPC is .75 and government spending and taxes both increase by $5 billion then GDP will: 6. If the MPC is .60 and government spending and taxes both decrease by $5 billion then GDP will: Target GDP Problems: 7. If the MPS is .25 and the current GDP is $180,000 and the target level of GDP is $160,000, what change in Government Spending is required to reach the target? 8. If the MPS is .67 and the current GDP is $150,000 and the target level of GDP is $210,000, what change in Government Spending is required to reach the target? 9. If the MPS is .20 and the current GDP is $150,000 and the target level of GDP is $175,000 what change in taxes would be required to reach the target? 10. If the MPS is .90 and the current GDP is $160,000 and the target level of GDP is $130,000 what change in taxes would be required to reach the target?

Answer 1

O MP C = 314 multiplen = tona. MPC & T314 . AGDP will be 4x50 - 200 billion mpe=2 , Tut spendry durcase by to be Gol multiple - the - 7 = 3 ملقا 6% + یا مهبل منا AP ( Increase in export of $50 bulloi will increase GDP by 200 billion. multiplier = 3 A batton to 30 bellidi durease in export will durease Epop y qobilloin MPC=0.75 DG=DT = s bellwin ODGDP = s bellici GDP will increase by $5 billion MPC=0.60 LAG=DT=5 bellici GDP will also decrear by $5 milliai