Country X's long run potential full employment level of Real GDP is estimated to be $24,100,000. However, the current actual Real GDP in country X stands at $ 18,000,000. Additional data shows consumers in country X have a marginal propensity to save (MPS) equal to 7%. Answer the following questions based on the above information. Suppose new calculations show country X faces a recessionary Real GDP = $4,800,000, and the income multiplier is now equal to8. By how much should Autonomous consumption" (spending) increase to close the $4,800,000 recessionary gap?
Country X's long run potential full employment level of Real GDP is estimated to be $24,100,000. However, the current actual Real GDP in country X stands at $ 18,000,000. Additional data shows consumers in country X have a marginal propensity to save (MPS) equal to 7%. Answer the following questions based on the above information. Suppose new calculations show country X faces a recessionary Real GDP = $4,800,000, and the income multiplier is now equal to8. By how much should Autonomous consumption" (spending) increase to close the $4,800,000 recessionary gap?
Chapter1: Making Economics Decisions
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![Country X's long run potential full employment level of Real GDP is estimated to be $24,100,000. However, the current actual Real GDP in country X stands at $
18,000,000. Additional data shows consumers in country X have a marginal propensity to save (MPS) equal to 7%. Answer the following questions based on the above
information. Suppose new calculations show country X faces a recessionary Real GDP = $4,800,000, and the income multiplier is now equal to8. By how much should
Autonomous consumption" (spending) increase to close the $4,800,000 recessionary gap?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe413fa4d-e5ec-4bd9-bfe0-d47d68c97973%2F1d6c7084-201a-467a-8384-2fb3164c21a8%2F6vsxs14_processed.png&w=3840&q=75)
Transcribed Image Text:Country X's long run potential full employment level of Real GDP is estimated to be $24,100,000. However, the current actual Real GDP in country X stands at $
18,000,000. Additional data shows consumers in country X have a marginal propensity to save (MPS) equal to 7%. Answer the following questions based on the above
information. Suppose new calculations show country X faces a recessionary Real GDP = $4,800,000, and the income multiplier is now equal to8. By how much should
Autonomous consumption" (spending) increase to close the $4,800,000 recessionary gap?
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