1.12. Congratulations again. Youve just been appointed economic adviser to the president of Examland. The mpe is...
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1.12. Congratulations again. You’ve just been appointed economic adviser to the president of Examland. The mpe is .6; autonomous investment is $1,000; autonomous government spending is $8,000; autonomous consumption is $10,000; and autonomous net exports are $1,000. (LO26W-2)
a. What is the equilibrium level of income in the country?
b. Autonomous net exports increase by $2,000. What will happen to income?
c. You’ve just learned the mpe changed from .6 to .5.
How will this information change your answers in a and b?
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