### Table of Economic Data| Real GDP | Consumption | Planned Investment | Government Purchases | Net Exports ||----------|-------------|--------------------|----------------------|-------------|| $9,000 | $7,800 | $1,500 | $1,000 | -$700 || $10,000 | $8,600 | $1,500 | $1,000 | -$700 || $11,000 | $9,400 | $1,500 | $1,000 | -$700 || $12,000 | $10,200 | $1,500 | $1,000 | -$700 || $13,000 | $11,000 | $1,500 | $1,000 | -$700 || $14,000 | $11,800 | $1,500 | $1,000 | -$700 |#### Questions:(a) What is the equilibrium level of real GDP in this economy?(b) Compute the marginal propensity to consume (MPC).(c) Compute the government expenditures multiplier.(d) Suppose net exports increase by $400 (assuming MPC, Government Purchases, and Planned Investment are the same). What will be the new equilibrium level of GDP? Consumption?### Instructions for Response:- Utilize the formula $ \Delta Y = \text{Multiplier} \times \Delta \text{Spending} $ to solve for changes in GDP.- Use $ MPC = \Delta \text{Consumption} / \Delta \text{GDP} $ for computation of MPC, where applicable.

Aggregate expenditure is the sum of consumption, planned investment, government spending, and net…

(a) What is the equilibrium level of real GDP in this economy? (b) Compute the marginal propensity to consume. (c) Compute the government expenditures multipler. (d) Suppose net export increases by $400 (Assuming MPC, Gevernment Purchases, and Planned Investn are the same). What will be the new equilibrium level of GDP? Consumption?

(a) What is the equilibrium level of real GDP in this economy? (b) Compute the marginal propensity to consume. (c) Compute the government expenditures multipler. (d) Suppose net export increases by $400 (Assuming MPC, Gevernment Purchases, and Planned Investn are the same). What will be the new equilibrium level of GDP? Consumption?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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