Decrease in autonomous investment have total expenditures

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A. What effect will a $30 billion decrease in autonomous investment have on total expenditures if the MPC is 0.9?

B. What happens to the level of national income in an economy with an MPC of 0.8 and if autonomous consumption increases by $20 billion, autonomous investment increases by $5 billion, autonomous government expenditures decrease by $ 10 billion, and autonomous net exports increase by $15 billion?

C. Suppose that the marginal propensity to consume in an economy is 0.75 and that there is a change in government spending that leads to a $20 billion increase in national income and total expenditures? What was the initial change in government spending that led to the change in national income?

Reference no: EM13832888

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