The spending multiplier is equal to what

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Reference no: EM13184049

The current position of the economy is given by the following variables:

Ca = 1500 (autonomous consumption)

G = 5000

T = 200

I = 2000

X= 100

M = 200

MPC = 0.75

Y (income) = Aggregate expenditures (C+I+G+X-M)

Find the equilibrium level of GDP (Y*).

Now suppose that the full employment GDP = 30,000

The spending multiplier is equal to what?
What is the necessary change in government spending alone that is needed to get the economy to full employment?
The tax multiplier is equal to what?
What is the necessary change in taxes alone that is needed to get the economy to full employment?

Reference no: EM13184049

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