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Problem 2 (30 points) In the table below, you will find information Bolivia's aggregate expenditure components and real GDP. Numbers are in millions. Planned Government Net Aggregate Unplanned Real GDP will Real Consumption Investment (1) purchases Exports Expenditure change in Unemployment GDP (Y) (C) (G) (NX (AE) inventories will 25000 9500 5500 6000 4250 26000 10250 5500 6000 4250 27000 5500 6000 4250 28000 5500 6000 4250 1. Calculate the marginal propensity to consume (MPC) and then Multiplier. (4 points) 2. Fill in the blanks the second column. Keep in mind that consumption is increasing by a constant amount. (6 points) 3. Calculate aggregate expenditure (AE) and fill in the blanks the last column of the table. What is the equilibrium real GDP? How do you know? (4 points) 4. Investment is expected to increase by 430 because of positive expectations about future profitability. What will be the change in current equilibrium real GDP that will take place? What will be the new equilibrium real GDP? Use the concept of multiplier in your calculations. Show calculation steps. (8 points) Government purchases multiplier is 3. If Bolivia's government wants to increase equilibrium real GDP from 26000 to 27000, how it should change the Government spending? Use the concept of multiplier in your calculations. Show calculation steps. (8 points)