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What is the spending multiplier for country

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Reference no: EM132601338

Suppose that the real GDP of a country is in equilibrium at $480 billion. Now suppose that planned investment decreases by $4 billion, and that this decrease causes real GDP to shift to a new equilibrium level of $470 billion.

Instructions: In part a, round your answer to 1 decimal place. In part b, round your answer to 2 decimal places.

a. What is the spending multiplier for this country?

b. What is the marginal propensity to save (MPS) for this country?

Reference no: EM132601338

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