QUESTION. Problem 1: Suppose the level of autonomous investment in an economy is SR 200 billion and
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QUESTION.
Problem 1:
Suppose the level of autonomous investment in an economy is SR 200 billion and consumption function of the economy is :
C = 100 + 0.80 Y .
(a) What is the value of MPC ?
(b) What is the value of MPS ?
(C) What is the value of the multiplier ?
(d) What will be the equilibrium level of income ?
(e) What will be the increase in national income ( Y ) if investment ( I ) increases by SR 25 billion ?
Related Book For
Macroeconomics Principles, Applications, and Tools
ISBN: 978-0132555234
7th Edition
Authors: Arthur O Sullivan, Steven M. Sheffrin, Stephen J. Perez
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