Use the information in the following table to answer the questions. Assume that the values represent billions
Question:
Use the information in the following table to answer the questions. Assume that the values represent billions of 2012 dollars.
a. What is the equilibrium level of real GDP?
b. What is the MPC?
c. Suppose net exports increase by $250 billion. What will be the new equilibrium level of real GDP? Use the multiplier formula to determine your answer.
Transcribed Image Text:
Real GDP Consumption (Y) (C) $18,000 $15,500 19,000 16,250 20,000 17,000 21,000 17,750 22,000 18,500 Planned Investment (1) $2,000 2,000 2,000 2,000 2,000 Government Net Purchases Exports (G) (NX) $1,500 -$500 1,500 -500 -500 -500 -500 1,500 1,500 1,500
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a The equilibrium level of real GDP is where Planned Aggregate Expenditure AE equals Real GDP Y We c...View the full answer
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