Work individually and solve the exercises below for the next class. 1) Fill in the missing values in the following table. Assume that the value of the MPC does not change as real GDP changes. a. What is the value of the MPC? b. What is the value of equilibrium real GDP? Planned Aggregate Unplanned Change in Expenditures Inventories (AE) National Planned Income Consumption GovernmentNet and Real Investment Purchases Exports GDP (1) (G) (NX) $9,000 $7.600 $1,200 $1,200 S400 10,000 8,400 1,200 1,200 400 11.000 9.200 1,200 1,200 400 12,000 10,000 1,200 1.200 400 13,000 10.800 1,200 1,200 400 2) Suppose a booming economy in Europe causes net exports to rise by US$ 75 billion in Saudi Arabia. If the MPC IS 0.8, what will be the change in equilibrium in GDP? - Would a larger multiplier lead to longer and more severe recessions or shorter and less severe recessions? Why? - Fill the blanks 1) Fill in the blanks in the table in the next column. Assume that taxes are zero; Marginal Propensity Marginal Propensity to Consume to Save (MPC) (MPS) National Income Consumption Savings and Real GDP (5) (7) $9,000 $8.000 $1,000 10,000 8,750 $1,250 11,000 9,500 $1.500 12,000 10,250 $1,750 13,000 11,000 $2.000