Answered: If the multiplier is 5 and investment…

If the multiplier is 5 and investment increases by $3 billion, equilibrium real GDP will increase by: a. None of the above b. $2 billion O C. c. $15 billion O d. $3 billion O e. $8 billion

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose that Amazon decides to spend $10 million on a new distribution center. If the marginal propensity to consume is .8. then how much will GDP go up by once the multiplier process has played out? O $10 million O $20 million O $40 milion O $50 million
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10.pr3 Following is a saving and investment schedule indicating that planned investment is constant 360 11 13 15 17 15 15 15 15 15 a) The equilibrium real GDP is $And saving and investment are both b The MPS and the multiplier is AS2 rise in the g schedule will cause real GDP to tie by S d) Use the investment schedule given in the table and assume a 52 increase in the saing schedule in the table that is, saving at every real GOP increase by S and at this real GOP, saving 4.1. Equilibrium real GDP will to.5 15 will be S d.2. The amount by which real GDP changes depends on the size of the change in the saving schedule and the size o