An economy has no imports and no income taxes, MPC is 0.9, and real GDP is $200 billion. Businesses increase investment by $10 billion. Calculate the multiplier and the change in real GDP. The multiplier is . The change in real GDP is $ billion.
An economy has no imports and no income taxes, MPC is 0.9, and real GDP is $200 billion. Businesses increase investment by $10 billion. Calculate the multiplier and the change in real GDP. The multiplier is . The change in real GDP is $ billion.
Chapter9: The Keynesian Model In Action
Section: Chapter Questions
Problem 8SQ
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![An economy has no imports and no income taxes, MPC is 0.9, and real GDP is $200 billion.
Businesses increase investment by $10 billion.
Calculate the multiplier and the change in real GDP.
The multiplier is .
billion.
The change in real GDP is](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa189223a-ae85-44b4-9613-606f8ee11505%2F6847ba60-3987-479d-8021-c4f0f7cf0165%2F5moqk5q_processed.jpeg&w=3840&q=75)
Transcribed Image Text:An economy has no imports and no income taxes, MPC is 0.9, and real GDP is $200 billion.
Businesses increase investment by $10 billion.
Calculate the multiplier and the change in real GDP.
The multiplier is .
billion.
The change in real GDP is
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