Calculate the new real GDP and explain why real GDP increases by more than $5 billion. An
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Calculate the new real GDP and explain why real GDP increases by more than $5 billion.
An economy has a fixed price level, no imports, and no income taxes. MPC is 0.80, and real GDP is $150 billion. Businesses increase investment by $5 billion.
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The marginal propensity to consume MPC is a key element in understanding the mechanisms of GDP growt...View the full answer
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