Gdp also consumption both rosesecond round

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Reference no: EM1320210

Q1. Assume that an initial $10 billion increase in investment spending expands GDP by $10 billion in the 1st round of the multiplier process. If GDP also consumption both rise by $6 billion in the second round of the process, Illustrate what is the MPc in this economy? Illustrate what is the size of the multiplier? If, instead, GDP also consumption both rose by $8 billion in the second round, Illustrate what would have been the size of the multiplier?

Q2. for the data in the subsequent table, the consumption function is C=200 + 0.8(Y-t). Fill in the columns in the table also identity the equilibrium output.

Reference no: EM1320210

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