Suppose autonomous government spending increases by $100 billion and the value of the MPC is 0.6. Use the following table to compute four rounds of the spending multiplier effect. New Consumption Spending Round Components of Total Spending (Billions of dollars) 1 Investment Consumption 3 Consumption Consumption After an infinite number of spending-output-spending rounds, the total change in real GDP resulting from the $100 billion increase in governr spending is S billion.

Answer fast

In each of the following cases, calculate the values of MPC, MPW, and the spending multiplier. Enter your responses below rounded to 2 decimal places. a. A $2 million increase in Income leads to a $700,000 rise in consumption on domestic items. MPC is therefore and the spending multiplier is b. A $10 million decrease in income results in a $3 million drop in consumption on domestic Items. MPC is therefore and the spending multiplier is c. A $10 million decrease in income causes a $9 million drop in withdrawals. MPC is therefore spending multiplier is MPW IS MPW IS MPW IS and the

If changes to expenditures include consumption at $2000, investment at $600, government spending at $500, exports are $100, imports are $200 and the mpc is 0.75, then:      the equilibrium income is $12,000          equilibrium income is $3000            the multiplier is 5          the slope of the AE curve is 0.25