Macroeconomics (7th Edition)
7th Edition
ISBN: 9780134738314
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Question
Chapter 12, Problem 12.3.12PA
Subpart (a):
To determine
To determine: The marginal propensity to consume.
Subpart (b):
To determine
The value of equilibrium GDP.
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Students have asked these similar questions
3. What happens in the economy if total production (TP) is greater than total expenditures
(TE)?
4. What is the relationship between a change in Real GDP (assuming a change in
autonomous spending) and (the size of) the MPC.
Real GDP
Consumption
Planned Investment
Government Purchases
Net Exports
$5,000
$4,500
$500
$325
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6,000
5,300
$500
$325
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7,000
6,100
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8,000
6,900
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3 A Answer the questions based on the table below. The values are in millions of dollars.
What is the equilibrium level of real GDP?
What is the MPC?
If potential GDP is $7,000 million, is the economy at full employment? If not, what is the condition of the economy?
If the economy is not at full employment, by how much should government spending increase so that the economy can move to the full employment level of GDP?
a. By how much will GDP change if firms increase their investment by $11 billion and the MPC is 0.8?
Instructions: Round your answers to the nearest whole number.
The change in GDP $
billion.
b. If the MPC is 0.5?
The change in GDP = $
billion.
Chapter 12 Solutions
Macroeconomics (7th Edition)
Ch. 12.A - Prob. 1RQCh. 12.A - Prob. 2RQCh. 12.A - Prob. 3RQCh. 12.A - Prob. 4RQCh. 12 - Prob. 12.1.1RQCh. 12 - Prob. 12.1.2RQCh. 12 - Prob. 12.1.3RQCh. 12 - Prob. 12.1.4PACh. 12 - Prob. 12.1.5PACh. 12 - Prob. 12.1.6PA
Ch. 12 - Prob. 12.1.7PACh. 12 - Prob. 12.1.8PACh. 12 - Prob. 12.1.9PACh. 12 - Prob. 12.2.1RQCh. 12 - Prob. 12.2.2RQCh. 12 - Prob. 12.2.3RQCh. 12 - Prob. 12.2.4RQCh. 12 - Prob. 12.2.5RQCh. 12 - Prob. 12.2.6PACh. 12 - Prob. 12.2.7PACh. 12 - Prob. 12.2.8PACh. 12 - Prob. 12.2.9PACh. 12 - Prob. 12.2.10PACh. 12 - Prob. 12.2.11PACh. 12 - Prob. 12.2.12PACh. 12 - Prob. 12.2.13PACh. 12 - Prob. 12.2.14PACh. 12 - Prob. 12.2.15PACh. 12 - Prob. 12.3.1RQCh. 12 - Prob. 12.3.2RQCh. 12 - Prob. 12.3.3RQCh. 12 - Prob. 12.3.4RQCh. 12 - Prob. 12.3.5RQCh. 12 - Prob. 12.3.6PACh. 12 - Prob. 12.3.7PACh. 12 - Prob. 12.3.8PACh. 12 - Prob. 12.3.9PACh. 12 - Prob. 12.3.10PACh. 12 - Prob. 12.3.12PACh. 12 - Prob. 12.4.1RQCh. 12 - Prob. 12.4.2RQCh. 12 - Prob. 12.4.3RQCh. 12 - Prob. 12.4.4PACh. 12 - Prob. 12.4.5PACh. 12 - Prob. 12.4.6PACh. 12 - Prob. 12.4.7PACh. 12 - Prob. 12.4.8PACh. 12 - Prob. 12.4.9PACh. 12 - Prob. 12.4.10PACh. 12 - Prob. 12.4.11PACh. 12 - Prob. 12.4.12PACh. 12 - Prob. 12.4.13PACh. 12 - Prob. 12.4.14PACh. 12 - Prob. 12.5.1RQCh. 12 - Prob. 12.5.2RQCh. 12 - Prob. 12.5.3RQCh. 12 - Prob. 12.5.4PACh. 12 - Prob. 12.5.5PACh. 12 - Prob. 12.5.6PACh. 12 - Prob. 12.1RDECh. 12 - Prob. 12.2CTECh. 12 - Prob. 12.3CTE
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