Use the information in the table to answer the following questions. All numbers are in billions of 2012 dollars Government Purchases (G) Real GDP (Y) $8,000 $9,000 $10,000 $11,000 $12,000 Consumption (C) $4,500 $5,000 $5,500 $6,000 $6,500 Planned Investment (1) $500 $500 $500 $500 $500 $4,000 $4,000 $4,000 $4,000 $4,000 The equilibrium level of GDP is $billion The MPC is (enter your response to two decimal places) Suppose that net exports increase by $300 billion Using the multiplier formula, determine the new level of GDP A$300 billion increase in net exports leads to a change in spending of 5 billion, so the level of GDP will be Net Exports (NX) $500 $500 $500 $500 $500
Use the information in the table to answer the following questions. All numbers are in billions of 2012 dollars Government Purchases (G) Real GDP (Y) $8,000 $9,000 $10,000 $11,000 $12,000 Consumption (C) $4,500 $5,000 $5,500 $6,000 $6,500 Planned Investment (1) $500 $500 $500 $500 $500 $4,000 $4,000 $4,000 $4,000 $4,000 The equilibrium level of GDP is $billion The MPC is (enter your response to two decimal places) Suppose that net exports increase by $300 billion Using the multiplier formula, determine the new level of GDP A$300 billion increase in net exports leads to a change in spending of 5 billion, so the level of GDP will be Net Exports (NX) $500 $500 $500 $500 $500
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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F3.
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Use the information in the table to answer the following questions. All numbers are in billions of 2012 dollars.
Planned
Investment (1)
$500
Government
Purchases (G)
$500
$500
$500
$500
Real GDP (Y)
$8,000
$9,000
$10,000
$11,000
$12,000
Consumption (C)
$4,500
$5,000
$5,500
$6,000
$6,500
$4,000
$4,000
$4,000
$4,000
$4,000
The equilibrium level of GDP is 5 billion
The MPC is (enter your response to two decimal places)
Suppose that net exports increase by $300 billion. Using the multiplier formula, determine the new level of GDP
A $300 billion increase in net exports leads to a change in spending of 5 billion, so the new level of GDP will be
billion
Net Exports
(NX)
-$500
-$500
$500
$500
$500
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