Economics In the small country of Lavinia; the GDP which means aggreagate supply is $ 120 billion, the MPS is 0.25, investment is $ 10 billion, and G is $ 10 billion. a) Is there an equilibrium in that economy? b) If there is a gap between agg. Supply and agg. Demand (e.g if AS> AD); what is the required increase in G if the Keynesian multiplier analysis is correct.

Economics In the small country of Lavinia; the GDP which means aggreagate supply is $ 120 billion, the MPS is 0.25, investment is $ 10 billion, and G is $ 10 billion. a) Is there an equilibrium in that economy? b) If there is a gap between agg. Supply and agg. Demand (e.g if AS> AD); what is the required increase in G if the Keynesian multiplier analysis is correct.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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