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GDP/Equilibrium and MPC

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GDP/Equilibrium and MPC questions:

C = 250 Billion +. 80GDP

Please use equation above for following questions:

1. If the planned investment is $200 billion, the equilibrium level of GDP is:

2. If the equilibrium is $2000 billion, autonomous investment is:

C = $100 + .80 (GDP); I = $20

Please use equation above to answer questions below.

3. Private sector equilibrium occurs at GDP of:

4. The equation for private sector equilibrium can be expressed as:

5. What is the value of the marginal propensity to consume?

6. What is the value of the multiplier

7. If planned investment increases by $10, by how much will equilibrium GDP increase?

8. The new equilibrium GDP after the $10 increase in investment is:

9. Assume government decided to spend $30. Equilibrium GDP at investment of $30 and government spending of $30 is:

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Solution Summary

What is the value of the marginal propensity to consume?