The economy in Kiribati has an MPC of 0.8 and the current level of real is...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The economy in Kiribati has an MPC of 0.8 and the current level of real is GDP is $80 billion. Suppose businesses in Kiribati increase investment by $5 billion. Suppose no other changes happen that could influence the level of real GDP. Please use the worksheet to answer questions given below. Show the formulas you used, calculations/explanations. i. Calculate the simple multiplier in the economy. ii. Calculate the increase in real GDP due to the increase in business investments. ii. Calculate the new level of real GDP with the increase in business investments. The new level of real GDP in the economy is $ billion. The economy in Kiribati has an MPC of 0.8 and the current level of real is GDP is $80 billion. Suppose businesses in Kiribati increase investment by $5 billion. Suppose no other changes happen that could influence the level of real GDP. Please use the worksheet to answer questions given below. Show the formulas you used, calculations/explanations. i. Calculate the simple multiplier in the economy. ii. Calculate the increase in real GDP due to the increase in business investments. ii. Calculate the new level of real GDP with the increase in business investments. The new level of real GDP in the economy is $ billion.
Expert Answer:
Related Book For
Macroeconomics Principles, Applications, and Tools
ISBN: 978-0132555234
7th Edition
Authors: Arthur O Sullivan, Steven M. Sheffrin, Stephen J. Perez
Posted Date:
Students also viewed these accounting questions
-
Suppose that a certain country has an MPC of .9 and a real GDP of $400 billion. If its investment spending decreases by $4 billion, what will be its new level of real GDP?
-
Answer these questions about GDP: a. How could real GDP grow, while, over the same period, real GDP per capita falls? b. If Country A has a 4 percent annual growth rate of real GDP and a 2 percent...
-
Calculate the percentage increase in real GDP in 2017. An economy produces only fun and food. The table shows the prices and the quantities of fun and food produced in 2016 and 2017. The base year is...
-
On 1 June 1998, Alice bought a house in Derby for 45,000. - She occupied the house as her PPR until 1 May 2000 when she left to work in Exeter, living in rented accommodation. - She returned to the...
-
A 2.54-cm-OD, 1.9-cm-ID steel pipe carries dry air at a velocity of 7.6 m/s and a temperature of 7C. Ambient air is at 21C and has a dew point of 10C. How much insulation with a conductivity of 0.18...
-
In Problems 6978, find bounds on the real zeros of each polynomial function. f (x) = 4x 5 + 5x 3 + 9x 2 + 3x 12
-
The following information is available for Banner Company: Calculate the following: a. 2019 debt-to-equity ratio. b. 2019 times-interest-earned ratio. c. 2019...
-
During the 2011 annual accounting period, BSP Company completed the following transactions: (a) On January 1, 2011, purchased a patent for $28,000 cash (estimated useful life, seven years). (b) On...
-
According to the Tukey HSD results, 3rd vs 4th q -stat was 1.08, p-value was 0.857 and insignificant. 3rd vs. 5th q-stat was 4.35, p-value was 0.017, less the 0.05, 3rd vs. 6th q-stat was 5.22,...
-
Pas Corporation acquired 80 percent of Sel Corporation's common stock on January 1, 2011, for $210,000 cash. The stockholders' equity of Sel at this time consisted of $150,000 capital stock and...
-
On January 1, 2011, Brooks purchased 15,000 shares of Tom for $490,000, giving Brooks a 10 percent ownership. On January 1, 2012 Brook purchased 10,000 shares giving Brook an additional 20 percent...
-
Betty is age 61 and was awarded $448,000 from her husband's 401(K) in their divorce which she transferred to an IRA. After hearing about 72(t)(2)(c) she then took out $44,000 to bring her...
-
The diffusion process describes how a new product is adopted throughout a targeted market segment. There are factors that influence how quickly this will happen to include complexity, relative...
-
Problem 1. (15 pts; each 5 pts) For each problem, use the appropriate trig substitution to find the integral. Make sure to draw the appropriate triangle, and write the expression for da in terms of...
-
Find the values of x for which the range of the given polynomial function is within the prescribed interval. P(x) = x -3x - 22x + 55; range [ 11, 67] ... The values of x for which the range of the...
-
Discuss the role of stochastic process modeling in representing uncertainty and variability within industrial processes, particularly in contexts where probabilistic analysis is required .
-
With a GDP of $494.3 billion (2016 est.) Switzerland ranks as the 40th largest economy in the world (CIA, 2017). For the standard of living of the average Swiss citizen the GDP per Capita gives a...
-
Refrigerant R-12 at 30C, 0.75 MPa enters a steady flow device and exits at 30C, 100 kPa. Assume the process is isothermal and reversible. Find the change in availability of the refrigerant.
-
1. Which of the following is not a component of GDP? a. Consumption b. Investment c. Producer Price Index d. Government purchases e. Net exports 2. What part of government spending is excluded from...
-
1. The average cost of producing an iPhone is about $ _____. 2. The cost of producing the first fake killer whale is about three times the cost of producing the second because the firm uses _____...
-
1. There is asymmetric information in the used-car market because _________ (buyers/sellers) cannot distinguish between lemons and plums but _________ (buyers/sellers) can. 2. The supply curve for...
-
Wilmot Real Estate Company experienced the following events during its first year of operations: 1. Received \($50,000\) in cash from investors as an equity investment. 2. Borrowed \($40,000\) in...
-
Presented below are the balance sheet accounts of the Mayfair Company as of December 1, 2017. The accounts are listed in random order. During the month of December 2017, the following events...
-
Marilyn Miller opened a floral shop using \($5,000\) of her own cash savings and with \($15,000\) in cash borrowed from her parents. She signed a lease on a small store for one year, agreeing to pay...
Study smarter with the SolutionInn App