d. What is the value of the multiplier?e. If planned investment spending rises to $450 billion, what will be the new Y*? In an economy with no government and no foreign sectors, autonomous consumer spending is $250 billion, planned investment spending is $350 billion, and the marginal propensity to consume is 2/3.

Answered: In an economy with no government and no…

In an economy with no government and no foreign sec- cors, autonomous consumer spending is $250 billion, planned investment spending is $350 billion, and the narginal propensity to consume is 2/3.

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

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Chapter1: Making Economics Decisions

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Question

d. What is the value of the multiplier?

e. If planned investment spending rises to $450 billion, what will be the new Y*?

In an economy with no government and no foreign sectors, autonomous consumer spending is $250 billion, planned investment spending is $350 billion, and the marginal propensity to consume is 2/3.

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Consumption Function : C=250+2/3Yd

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