a. Calculate the total change in spending given the information below. Marginal Propensity to Consume = .63

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a. Calculate the total change in spending given the information below.

Marginal Propensity to Consume = .63

Increase in Spending = $599 M

b. Please illustrate assuming the economy was operating at full employment prior to the change in part a. Does a GDP gap exist? If so, what type?

Related Book For answer-question

Introductory Econometrics A Modern Approach

ISBN: 978-0324660548

4th edition

Authors: Jeffrey M. Wooldridge

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Posted Date: Oct 11, 2018 07:01 AM

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a. Calculate the total change in spending given the information below. Marginal Propensity to Consume = .63

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a MPC 63 Increase in spending 599M Total change in spending multiplier i... View the full answer

Introductory Econometrics A Modern Approach

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