Country X's long run full employment level of Real GDP is estimated to be$22,900,000. However, the actual Real GDP equals to $17,900,000.Data also shows that in country X's Marginal Propensity to Consume (MPC) iscalculated to be 91% (0.91).Answer the following questions.1. Vite !!!II!. SV MSienou! Dunn?-ncit.CUICUI12MureNIV. Explain what the income multiplier value you obtained in part III means.V. If Real GDP gap in the neighboring country Y is $5,550,000, with income multiplier 9.2,by how much should country Y's "Autonomous consumption" (i.e. spending) change to closethe $5,550,000 gap?

In macroeconomics, understanding the concept of potential output and its relationship with actual…

Country X's long run full employment level of Real GDP is estimated to be $22,900,000. However, the actual Real GDP equals to $17,900,000. Data also shows that in country X's Marginal Propensity to Consume (MPC) is calculated to be 91% (0.91). Answer the following questions. 1. W II!. C VM- 5. win? S? - Culculu..., NI I IV. Explain what the income multiplier value you obtained in part III means. V. If Real GDP gap in the neighboring country Y is $5,550,000, with income multiplier 9.2, by how much should country Y's "Autonomous consumption" (i.e. spending) change to close the $5,550,000 gap?

Country X's long run full employment level of Real GDP is estimated to be $22,900,000. However, the actual Real GDP equals to $17,900,000. Data also shows that in country X's Marginal Propensity to Consume (MPC) is calculated to be 91% (0.91). Answer the following questions. 1. W II!. C VM- 5. win? S? - Culculu..., NI I IV. Explain what the income multiplier value you obtained in part III means. V. If Real GDP gap in the neighboring country Y is $5,550,000, with income multiplier 9.2, by how much should country Y's "Autonomous consumption" (i.e. spending) change to close the $5,550,000 gap?

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter9: Demand-side Equilibrium: Unemployment Or Inflation?

Section: Chapter Questions

Problem 7TY

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