question archive Answer every part of the following question: Duria is a closed economy
Answer every part of the following question: Duria is a closed economy
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Answer every part of the following question: Duria is a closed economy. When disposable income is $0, consumption in Duria is D160 billion (all the numbers are in billion of Durians, the currency of Duria). Suppose the marginal propensity to consume is 0.75; investment is D800; government purchases of goods and services are D 1200; and taxes are a constant D1000 and do not vary with income. At the expenditure equilibrium (i.e. where aggregate expenditure equals total output) calculate: i. real GDP ii. consumption iii. saving iv. marginal propensity to save V. the government spending multiplier
