(a) Use the information in the table below to answer the following questions. i. Real GDP...

 

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(a) Use the information in the table below to answer the following questions. i. Real GDP (Y) V. $10,000 11,000 12,000 13,000 14,000 Consumption Planned (C) Investment (1) $8,500 9,350 10,200 11,050 11,900 $1,200 1,200 1,200 1,200 1,200 Government purchases (G) $1,000 1,000 1,000 1,000 1,000 Net exports (NX) -$400 -400 -400 -400 -400 Aggregate Expenditure $10,300 i. Determine the aggregate planned expenditure and fill in the blank spaces in the above table. ii. Determine the equilibrium Gross Domestic Product (GDP). iii. Compute the Marginal Propensity to Consume (MPC). iv. Assume an increase in autonomous spending of $300 billion; determine the resulting multiplier and GDP equilibrium. To illustrate (ii) and (iv), draw the equilibrium GDP on a 45°C line diagram. (a) Use the information in the table below to answer the following questions. i. Real GDP (Y) V. $10,000 11,000 12,000 13,000 14,000 Consumption Planned (C) Investment (1) $8,500 9,350 10,200 11,050 11,900 $1,200 1,200 1,200 1,200 1,200 Government purchases (G) $1,000 1,000 1,000 1,000 1,000 Net exports (NX) -$400 -400 -400 -400 -400 Aggregate Expenditure $10,300 i. Determine the aggregate planned expenditure and fill in the blank spaces in the above table. ii. Determine the equilibrium Gross Domestic Product (GDP). iii. Compute the Marginal Propensity to Consume (MPC). iv. Assume an increase in autonomous spending of $300 billion; determine the resulting multiplier and GDP equilibrium. To illustrate (ii) and (iv), draw the equilibrium GDP on a 45°C line diagram.

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To determine the aggregate planned expenditure and fill in the blank spaces in the table we sum up the components of aggregate expenditure for each le... View the full answer