What is the mpc in this economy

Assignment Help Macroeconomics

Reference no: EM133438936

Question: Suppose that an initial $40 billion increase in investment spending expands GDP by $40 billion in the first round of the multiplier process. Also assume that GDP and consumption both rise by $24 billion in the second round of the process. Instructions: Round your answers to 1 decimal place.

a. What is the MPC in this economy? $[ b. What is the size of the multiplier? c. If, instead, GDP and consumption both rose by $32 billion in the second round, what would have been the size of the multiplier?

Reference no: EM133438936

Questions Cloud

Which sentence in this excerpt from john lewis : which sentence in this excerpt from John Lewis, is walking with the wind memoir of the movement shows that the author was influenced by Henry David thorough

Explain how economic forces such as employment, income : explain how economic forces such as employment, income, prices, interest rates, and consumer confidence influence the purchasing decisions you make as

Describe how interest rates are determined : Briefly describe how interest rates are determined and how monetary policy affects interest rates. Illustrate using a diagram how interest rates are determined.

Discusses ethically and socially responsible behavior : Discusses the ethically and socially responsible behavior of businesses. When companies integrate ethics and values into their strategy and objectives

What is the mpc in this economy : What is the MPC in this economy? $ What is the size of the multiplier? If, instead, GDP and consumption both rose by $32 billion in the second round

What does the solow model predict will happen to these : What does the Solow model predict will happen to these countries in the long run? Is this consistent with available data?

What you learn about the riot : what you learn about the riot, please suggest how policing might be improved to reduce the likelihood of riots and to bring them to a speedier

Managerial strategy change current structure : How might this change in managerial strategy change the current structure of the organization, if at all?

Describe how active policy would respond : Describe how active (monetary) policy would respond (if at all) to stabilize inflation in response to the shock in pail (1.c). What is the likely effect

User Account

All Pages