5.a)From the following data, find the marginal propensity to consume, compute the expenditure at each level of GDP, and find the equilibrium GDP: (Note:Expenditure=C+I+G+(X-M))

GDPCIGX IM

5,0003,6501,0001,2007001,100

5,5004,0001,0001,2007001,100

6,0004,3501,0001,2007001,100

6,5004,7001,0001,2007001,100

7,0005,0501,0001,2007001,100

7,5005,4001,0001,2007001,100

b)Suppose now that imports depend upon the level of GDP, so that the IM column in part a) is replaced by:

GDPIM

5,0001,100

5,5001,175

6,0001,250

6,5001,325

7,0001,400

7,5001,475

Find the marginal propensity to import, compute the expenditure at each level of GDP, and find the equilibrium GDP. Why do the equilibrium GDPs in a) and b) differ?