Suppose a closed economy with no government spending or taxing is capable of producing an output of $3,000 at full employment.  Suppose also that autonomous consumption is $400, intended investment is $200, and on average households will save 25 cents of every additional dollar of income they receive.  Calculate the following (express your answers as whole numbers without decimals, commas, dollar signs, or anything else). I found  Value of output (Y) in equilibrium: ___2400___ Total consumption in equilibrium: ___2200___ I'm trying to find the multiplier. Could you sh

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Suppose a closed economy with no government spending or taxing is capable of producing an output of $3,000 at full employment.  Suppose also that autonomous consumption is $400, intended investment is $200, and on average households will save 25 cents of every additional dollar of income they receive.  Calculate the following (express your answers as whole numbers without decimals, commas, dollar signs, or anything else).

I found 

Value of output (Y) in equilibrium: ___2400___

Total consumption in equilibrium: ___2200___

I'm trying to find the multiplier. Could you show me a step by step on how you would figure the multiplier out? 

 

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Is the mpc in the multiplier .75? 

only because multiplier is 1/(1-mpc) which would make sense for .25 

1-.75=.25

however what is mps? 

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