Question
An increase in spending of $50 billion increases real GDP from $600 billion to $800 billion in Economics Land. The marginal propensity to consume and
An increase in spending of $50 billion increases real GDP from $600 billion to $800 billion in Economics Land. The marginal propensity to consume and the multiplier must be?(please show your work)
See the information from Economics Land below. What is the equilibrium interest rate in Economics Land? What is the level of investment at the equilibrium interest rate? Is there either a recessionary output gap (negative GDP gap) or an inflationary output gap (positive GDP gap) at the equilibrium interest rate and, if either, what is the amount? Given money demand, by how much would the Economics Land central bank need to change the money supply to close the output gap? What is the expenditure multiplier in Economics Land?
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