Research by a team of expert economists has uncovered the consumption and import functions and produced a forecast of planned investment and exports for the economy of Glamourburg as reported below: Real GDP Y Consumption C Investment I Exports X Imports IM 0 100 100 75 25 100 190 100 75 65 200 280 100 75 105 300 370 100 75 145 400 460 100 75 185 500 550 100 75 225 600 640 100 75 265 700 730 100 75 305 800 820 100 75 345 900 910 100 75 385 1,000 1,000 100 75 425 1,100 1,090 100 75 465 1,200 1,180 100 75 505 a) What equilibrium real GDP would Glamourburg produce? Equilibrium real GDP: 0 b) What are the marginal propensities to consume and import in Glamourburg. Note: Keep as much precision as possible during your calculations. Your final answer should be accurate to at least two decimal places. Marginal propensity to consume: 0 Marginal propensity to import: 0 c) What is the size of the multiplier? Note: Keep as much precision as possible during your calculations. Your final answer should be accurate to at least two decimal places.
Research by a team of expert economists has uncovered the consumption and import functions and produced a forecast of planned investment and exports for the economy of Glamourburg as reported below: Real GDP Y Consumption C Investment I Exports X Imports IM 0 100 100 75 25 100 190 100 75 65 200 280 100 75 105 300 370 100 75 145 400 460 100 75 185 500 550 100 75 225 600 640 100 75 265 700 730 100 75 305 800 820 100 75 345 900 910 100 75 385 1,000 1,000 100 75 425 1,100 1,090 100 75 465 1,200 1,180 100 75 505 a) What equilibrium real GDP would Glamourburg produce? Equilibrium real GDP: 0 b) What are the marginal propensities to consume and import in Glamourburg. Note: Keep as much precision as possible during your calculations. Your final answer should be accurate to at least two decimal places. Marginal propensity to consume: 0 Marginal propensity to import: 0 c) What is the size of the multiplier? Note: Keep as much precision as possible during your calculations. Your final answer should be accurate to at least two decimal places.
Chapter11: Managing Aggregate Demand: Fiscal Policy
Section: Chapter Questions
Problem 2TY
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Transcribed Image Text:Research by a team of expert economists has uncovered the consumption and import functions and produced a forecast of planned investment and exports for the
economy of Glamourburg as reported below:
Real GDP Y
Consumption C
Investment I
Exports X
Imports IM
0
100
100
75
25
100
190
100
75
65
200
280
100
75
105
300
370
100
75
145
400
460
100
75
185
500
550
100
75
225
600
640
100
75
265
700
730
100
75
305
800
820
100
75
345
900
910
100
75
385
1,000
1,000
100
75
425
1,100
1,090
100
75
465
1,200
1,180
100
75
505
a) What equilibrium real GDP would Glamourburg produce?
Equilibrium real GDP: 0
b) What are the marginal propensities to consume and import in Glamourburg.
Note: Keep as much precision as possible during your calculations. Your final answer should be accurate to at least two decimal places.
Marginal propensity to consume: 0
Marginal propensity to import:
0
c) What is the size of the multiplier?
Note: Keep as much precision as possible during your calculations. Your final answer should be accurate to at least two decimal places.
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