d) What is the value of unplanned changes in the inventory investment when real GDP is $4000? e) What is the size of the multiplier in this economy? f) If investment spending increases by $50, what would be the value of the change in the equilibrium real GDP?
Note: I need help with parts d, e, and f only
Following is information for the economy of Sparkle. All units are million
dollars. Their autonomous consumption is $700, and the marginal propensity to consume is 0.8.
Investment spending is constant at $380, and government expenditure is constant at $300.
Exports are constant at $500, and imports are constant at $800. Net taxes are constant at $100.
Calculate and state your answers for the following questions.
a) What is the value of consumption in this economy when the real GDP is $1100?
b) What is the value of autonomous aggregate planned expenditure i.e. AE0?
c) What is the value of equilibrium aggregate expenditure for this economy?
d) What is the value of unplanned changes in the inventory investment when real GDP is
$4000?
e) What is the size of the multiplier in this economy?
f) If investment spending increases by $50, what would be the value of the change in the
equilibrium real GDP?
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