Answered: a. By how much will GDP change if firms…

a. By how much will GDP change if firms increase their investment by $9 billion and the MPC is 0.9? Instructions: Round your answer to the nearest whole number. Change in GDP $ 9 billion

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

ChapterD: The Expenditure-output Model

Section: Chapter Questions

Problem 24CTQ: Exercise D24 Compare two policies: a tax cut on income or an increase in government spending on...

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Question

100%

ingr
Income (GDP = DI)
$480
520
560
600
640
680
720
760
800
Consumption
512
536
560
504
608
632
b. If the MPC is 0.75?
656
680
704
Saving
$-32
-16
0
16
32
48
64
80
96
What is the value of the marginal propensity to consume?
APC
Instructions: Round your answer to the nearest whole number.
Change in GDP =
billion.
1.067
0.990
0.880
APS
-0.067
0.027
a. By how much will GDP change if firms increase their investment by $9 billion and the MPC is 0.9?
Instructions: Round your answer to the nearest whole number.
Change in GDP-
9 billion.
0.120

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