Suppose that the real gdp of a country is in equilibrium at $480 billion

Subject:EconomicsPrice:2.87 Bought7

Share With

Suppose that the real gdp of a country is in equilibrium at $480 billion. Now suppose that planned investment decreases by $4 billion, and that this decrease causes real GDP to shift to a new equilibrium level of $470 billion.

1. What is the spending multiplier for the country? What is the marginal propensity to save for the country?

2 The consumption schedule for a country with a private closed economy is shown on the graph below. The level of planned investment for the country is $billion.

a. Draw the aggregate expenditures schedule for this country and identify equilibrium GDP.

b. What is the equilibrium gdp for the country?

c. What is the marginal propensity to consume for the country?