# Question

For each of the following values for the MPC, determine the size of the simple spending multiplier and the total change in real GDP demanded following a $10 billion decrease in autonomous spending:

a. MPC = 0.9

b. MPC = 0.75

c. MPC = 0.6

a. MPC = 0.9

b. MPC = 0.75

c. MPC = 0.6

## Answer to relevant Questions

If consumption increases by $12 billion when real disposable income increases by $15 billion, what is the value of the MPC? What is the relationship between the MPC and the MPS? If the MPC rises, what must happen to the MPS? ...Assume that E. Guard Company uses a periodic inventory system and has these account balances:Purchases ............. $400,000Purchase Returns & Allowances .... $ 11,000Purchase Discounts ......... $ 8,000Freight-in ...Presently many European countries are in the middle of an economic slump, where output has fallen below potential output (by a large degree in the case of some countries). Suppose one of these countries decides to follow the ...A city wants to know the amount of recycling collected on an average day. They know from previous experience that the standard deviation is 1.5. City officials take a random sample of 26 days and calculate a sample mean of ...The executor of Rose Shield's estate listed the following properties (at fair value):Cash ................. $300,000Life insurance receivable ......... 200,000Investments in stocks and bonds ..... 100,000Rental property ...Post your question

0