Homework Answers
a)
change in GDP = change in investment *(1/(1-MPC))
= 11billion* (1/(1-0.8)) = $55 billion
b)
change in GDP = change in investment *(1/(1-MPC))
= 11billion* (1/(1-0.5)) = $22 billion
Add Answer to:
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number.
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$ ___________ billion
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a?
$ ___________ billion
Suppose instead that the MPC is 0.8.
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