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1) At an initial point on the aggregate demand curve, the price level is 125, and real GDP is $10 trillion. When the price level falls to a value of 120, total autonomous expenditures increase by $800 billion. The marginal propensity to consume is 0.6. The level of real GDP at the new point on the aggregate demand curve is
A.)$14.4 trillion
B.)$12 trillion.
C.)$10.8 trillion
D.)$2 trillion
2) The marginal propensity to consume is equal to 0.50. An increase in household wealth causes autonomous consumption to rise by $30 billion.
Calculate by how much equilibrium real GDP will increase at the current price level, other things being equal.
Equilibrium real GDP will increase by _____billion.
(Enter your response as a whole number.)
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