In an economy without government purchases, transfers, or taxes, and without imports or exports, aggregate autonomous consumer

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In an economy without government purchases, transfers, or taxes, and without imports or exports, aggregate autonomous consumer spending is $500 billion, planned investment expenditure is $250 billion, and the marginal propensity to consume is 0.5.

a. Write the expression for planned aggregate spending as in Equation 11A-1.

b. Solve for Y* algebraically.

c. What is the value of the multiplier?

d. How will Y* change if autonomous consumer spending falls to $450 billion?

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Macroeconomics

ISBN: 978-1319120054

3rd Canadian edition

Authors: Paul Krugman, Robin Wells, Iris Au, Jack Parkinson

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Question Posted: Dec 03, 2018 07:24 AM

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In an economy without government purchases, transfers, or taxes, and without imports or exports, aggregate autonomous consumer

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Macroeconomics

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