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Based on the give table
a) What is the marginal propensity to consume implicit in this data?
b) What is the numberical value of the multipler for this economy?
c) What is the equilibruim level of the real GDP?
d) Suppose that government spending (G) decreased from 1000 to 400 at each level of income. What would happen to the equilibruim level of real GDP?
Y C I G
7000 6600 400 1000
8000 7400 400 1000
9000 8200 400 1000
10000 9000 400 1000
11000 9800 400 1000
12000 10600 400 1000
13000 11400 400 1000
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The production function is the:
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