Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Question
Chapter 30, Problem 6IAPA
To determine
To calculate:
The equilibrium expenditure and the multiplier when the investment increases by $0.5 trillion.
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Students have asked these similar questions
Explain the basic idea of the expenditure multiplier and the role consumers' play.
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An economy has neither imports nor income taxes. The MPC is 0.75 and the real GDP is $120 billion. The government increases expenditures by $4
billion.
The multiplier is _____ and the change in real GDP from the increase in government expenditures is _____ billion.
The table shows real GDP, Y, consumption expenditure, C, investment, /,
government expenditure on goods and services, G, exports, X, imports, M, and
aggregate planned expenditure, AE, in trillions of dollars. Taxes are constant.
If government expenditure increases to $1.2 trillion but other things remain
the same, what is equilibrium expenditure and what is the multiplier?
>>> Answer to 1 decimal place.
The new equilibrium expenditure is $
trillion.
Planned expenditure
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C
G
X
M
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0.4
1.4
0.4
1.0
0.0
3.2
2
2.0
1.4
0.4
1.0
0.4
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4
3.6
1.4
0.4
1.0
0.8
5.6
6
5.2
1.4
0.4
1.0
S
6.8
8
6.8
R
0.4
1.0
1.6
8.0
10
Q
1.4
0.4
1.0
2.0
9.2
12
10.0
1.4
0.4
1.0
2.4
10.4
Chapter 30 Solutions
Foundations of Economics (8th Edition)
Ch. 30 - Prob. 1SPPACh. 30 - Prob. 2SPPACh. 30 - Prob. 3SPPACh. 30 - Prob. 4SPPACh. 30 - Prob. 5SPPACh. 30 - Prob. 6SPPACh. 30 - Prob. 7SPPACh. 30 - Prob. 8SPPACh. 30 - Prob. 9SPPACh. 30 - Prob. 1IAPA
Ch. 30 - Prob. 2IAPACh. 30 - Prob. 3IAPACh. 30 - Prob. 4IAPACh. 30 - Prob. 5IAPACh. 30 - Prob. 6IAPACh. 30 - Prob. 7IAPACh. 30 - Prob. 8IAPACh. 30 - Prob. 9IAPACh. 30 - Prob. 10IAPACh. 30 - Prob. 1MCQCh. 30 - Prob. 2MCQCh. 30 - Prob. 3MCQCh. 30 - Prob. 4MCQCh. 30 - Prob. 5MCQCh. 30 - Prob. 6MCQCh. 30 - Prob. 7MCQCh. 30 - Prob. 8MCQ
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