Question: Use the relationship between an initial change in spending and the final change in real GDP to answer these questions about the economies of

Use the relationship between an initial change in spending and the final

Use the relationship between an initial change in spending and the final change in real GDP to answer these questions about the economies of Utopia and Paradise. The government of Utopia increases spending by $3 billion and the multiplier is 4.2. Real GDP will $ When interest rates in Paradise rise substantially, investment falls by $1000, and real GDP falls by $6,300. What is the multiplier? multiplier: by how many billion dollars? When the Utopian soccer team lost to Paradise because of a questionable call by the referee, many Utopians stopped buying Paradisian portabello mushrooms. Real GDP in Paradise fell by $200. If the multiplier is 1.6, by how much did exports fall? $

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