Suppose GDP is composed of consumption (C), investment (I), and government spending (G). Round your answers to the nearest whole number. If autonomous consumption is 50, the marginal propensity to consume (MPC) is 0.5, the tax rate is 15 percent, investment is 15, and government spending is 50, then the equilibrium output is 170 If autonomous consumption, MPC, investment, and government spending are unchanged, but the tax rate increases to 0.25, then the equilibrium output would be 184 If autonomous consumption, MPC, and investment are unchanged, but the tax rate increase is accompanied by government spending increasing to 70, then the equilibrium output would be 216
Suppose GDP is composed of consumption (C), investment (I), and government spending (G). Round your answers to the nearest whole number. If autonomous consumption is 50, the marginal propensity to consume (MPC) is 0.5, the tax rate is 15 percent, investment is 15, and government spending is 50, then the equilibrium output is 170 If autonomous consumption, MPC, investment, and government spending are unchanged, but the tax rate increases to 0.25, then the equilibrium output would be 184 If autonomous consumption, MPC, and investment are unchanged, but the tax rate increase is accompanied by government spending increasing to 70, then the equilibrium output would be 216
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Suppose GDP is composed of consumption (C), investment (I), and
government spending (G).
Round your answers to the nearest whole number.
If autonomous consumption is 50, the marginal propensity to
consume (MPC) is 0.5, the tax rate is 15 percent, investment is 15,
and government spending is 50, then the equilibrium output is
170
If autonomous consumption, MPC, investment, and government
spending are unchanged, but the tax rate increases to 0.25, then the
equilibrium output would be 184
If autonomous consumption, MPC, and investment are unchanged,
but the tax rate increase is accompanied by government spending
increasing to 70, then the equilibrium output would be
216
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