7. The multiplier and the MPC Consider two closed economies that are identical except for their marginal propensity to consume (MPC). Each economy is currently in equilibrium. with real GDP and aggregate expenditure equal to $100 billion, as shown by the black points on the following two graph . Neither economy has takes that change with income. The grey lines show the 45-degree line on each graph. The first economy's MPC Is 0.5. Therefore, its Initial aggregate expenditure line has a slope of G.5 and parises through the point (100, 160) The second economy's MPC is 0.6. Therefore, It's initial aggregate expenditure line has a slope of 0.6 and passes through the paint (103, 100). Now, suppose there is an increase of $40 billion in investment in each economy. Place a green line (triangle symbol) on each of the previous graphs to indicate the new aggregate expendeure line for each economy. Then place a black point (plus symbol) on each graph showing the new level of equilibrium output. (Hint: You can see the slope and vertical axis intercept of a line on the graph by selecting it.) MPC-15 48-Degree Line Nam AE Line .+ 140 New Egltrum 129 REGATE EXPENDITURE (Billions of dollar) g AE Lie