Y C I G X $ 100 $ 120 $ 20 $ 30 $ 10 $ 300 $ 300 $ 20 $ 30 - $ 10 $ 500 $ 480 $ 20 $ 30 - $ 30 $ 700 $ 660 $ 20 $ 30 - $ 50 14.If government spending increases by $ 15, what is the new equilibrium level of the real GDP? If government spending increases by $ 15 then to find the new equilibrium I can use the recessionary GAP formula Recessionary GAP = GDP Gap / Spending Multiplier (5) 15 = GDP Gap (5) 5 75 = GDP Gap GDP Gap + Old equilibrium level of the real GDP = New equilibrium level of the real GDP 75 + 500 = $ 575 New equilibrium level of the real GDP This answer is right or wrong? if it is wrong then help me with the right one What is the MPS?
Y C I G X
$ 100 $ 120 $ 20 $ 30 $ 10
$ 300 $ 300 $ 20 $ 30 - $ 10
$ 500 $ 480 $ 20 $ 30 - $ 30
$ 700 $ 660 $ 20 $ 30 - $ 50
14.If government spending increases by $ 15, what is the new equilibrium level of the real
If government spending increases by $ 15 then to find the new equilibrium I can use the recessionary GAP formula
Recessionary GAP = GDP Gap / Spending Multiplier
(5) 15 = GDP Gap (5)
5
75 = GDP Gap
GDP Gap + Old equilibrium level of the real GDP = New equilibrium level of the real GDP
75 + 500 = $ 575 New equilibrium level of the real GDP
This answer is right or wrong? if it is wrong then help me with the right one
- What is the MPS?
Because disposable income will be either consumed or saved, the marginal propensity to consume plus the marginal propensity to save must total 1. The MPC of this economy is 0.9
MPC + MPS = 1
0.9 + MPS = 1
- 0.9 + MPS = - 0.9
MPS = 0.1
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