Question: a. What is the marginal propensity to consume implicit in these data? b. What is the numerical value of the expenditure multiplier for this economy?

a. What is the marginal propensity to consume implicit in these data?

b. What is the numerical value of the expenditure multiplier for this economy?

c. What is the equilibrium level of real GDP?

d. Suppose that government purchases (G) decreased from 1,000 to 400 at each level of income. What would happen to equilibrium real GDP?

Real GDP NX 6,100 6,900 7,700 8,500 9,300 10,100 10,900 7,000 8,000 9,000 10,000 11,000 12,000 13,000 400 1,000 1,000 1,

Real GDP NX 6,100 6,900 7,700 8,500 9,300 10,100 10,900 7,000 8,000 9,000 10,000 11,000 12,000 13,000 400 1,000 1,000 1,000 1,000 1,000 1,000 1,000 500 400 500 400 400 500 500 500 400 400 500 400 500

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