a) Assume that the multiplier in a country is equal to 4 and that autonomous real consumption

spending is $1 trillion. If current real GDP is $15 trillion, what is the current value of real

consumption spending?

b) An economy has a fixed price level, no imports, and no income taxes. An increase in

autonomous expenditure of $2 trillion increases equilibrium expenditure by $8 trillion. Calculate

the multiplier and the marginal propensity to consume.