Principles of Economics (12th Edition)
12th Edition
ISBN: 9780134078779
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Question
Chapter 23, Problem 5.3P
Subpart (a):
To determine
MPC.
Subpart (b):
To determine
MPS
Subpart (c):
To determine
Multiplier.
Subpart (d):
To determine
Amount of unplanned investment.
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Use the graph to answer the questions that follow.
a.What is the value of the MPC?b.What is the value of the MPS?c.What is the value of the multiplier?d.What is the amount of unplanned investment at aggregateoutput of 300, 900, and 1,300?
Use the graph to answer the following questions:
a)what is the value of the MPC?
b)what is the value of the MPS?
Use the information in the table to answer the following questions. All numbers are in billions of 2012 dollars.
Planned
Investment (1)
Real GDP (Y)
$14,000
$15,000
$16,000
$17,000
$18,000
The equilibrium level of GDP is $
The MPC is
billion.
Consumption (C)
$11,000
$11,750
$12,500
$13,250
$14,000
$1,500
$1,500
$1,500
$1,500
$1,500
(enter your response to two decimal places).
Suppose that net exports increase by $400 billion. Using the multiplier formula, determine the new level of GDP.
A $400 billion increase in net exports leads to a change in spending of $ billion, so the new level of GDP will be
$ billion.
Government
Purchases (G)
$2,500
$2,500
$2,500
$2,500
$2,500
Net Exports
(NX)
- $500
- $500
- $500
- $500
- $500
Chapter 23 Solutions
Principles of Economics (12th Edition)
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