Suppose that the MPC is 0.8 and that $14 trillion of real GDP is currently being demanded. The government wants to increase real GDP demanded to $15 trillion at the given price level. By how much would it have to increase government purchases to achieve this goal?
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Ответ:
$200 billion
Explanation:
Given that,
Marginal propensity to consume, MPC = 0.8
Real GDP currently being demanded = $14 trillion
Government wants to increase real GDP demanded to $15 trillion.
Multiplier:
= 5
Government wants to increase real GDP by:
= $15 trillion - $14 trillion
= $1 trillion
Therefore, the government has to increase spending:
= 0.2 × $1 trillion
= $200 billion
Ответ:
hope this !