An economy has a consumption function of C = 20 + 0.75(YD), taxes = 10+0.2(Y), investment equal to 10, government expenditure equal to 15, exports equal to 15, and an import function of M = 10. 1) What is the equilibrium real GDP for this economy? O A. 156.25 O B. 146.88 OC. 106.25 O D. 150.50 2) What is the multiplier for a change in government spending for this economy? O A. 3.5 O B. 2.5 OC. 3.0 O D. 4.0

An economy has a consumption function of C = 20 + 0.75(YD), taxes = 10+0.2(Y), investment equal to 10, government expenditure equal to 15, exports equal to 15, and an import function of M = 10. 1) What is the equilibrium real GDP for this economy? O A. 156.25 O B. 146.88 OC. 106.25 O D. 150.50 2) What is the multiplier for a change in government spending for this economy? O A. 3.5 O B. 2.5 OC. 3.0 O D. 4.0

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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