Hi Coursehero, I am having issue trying to understand how to answer the problem below:

Aplia Homework: Demand-Side Equilibrium: Unemployment or Inflation? Back to Antigament Attempts: 3.1 Keep the Highest: 3.1/5 3. 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 total expenditure n, as shown by the black points on the following two graphs. Neither economy has taxes that change with income. The grey lines show the 45-degree line on each graph. The first economy's MPC is 0.5. ses through the point (100, 100)- passes through the point (100, 100). Place a green line (triangle symbol) on each of the previous graphs to indicate the new to Inditure 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.) Aplia Homework: Demand-Side Equilibrium: Unemployment or Inflation? Place a green line (triangle symbol) on each of the previous graphs to re 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-0.5 45-Degree Line TOTAL EXPENDITURE (Billions of dollars) New AE Line .+ New Equilibrium AE Line REAL GDP (Billions of 120 140 160 180 200 (? In the first economy (with MPC - 0.5), the $40 billion decrease in investment causes equilibrium output to decrease by 5 billion. In the second economy (with MPC - 0.6), the $40 billion decrease in investment causes equilibrium output to decrease by 5 billion, Therefore, a higher MPC MPC=0.6 is associated with a multiplier. TOTAL EXPENDITURE (Billions of dollars) 8 8 8 8 8 8 8 8 8 8 45-Degree Line Now, confirm your graphical analysis algebraically using the oversimplified multiplier formula: A New AE Line Multiplier - 1 MIC For the first economy, with an MPC of 0.5, the effect of the $40 billion decrease in investment is as follows: New Equilibrium Change in Equilibrium Output - Change in Total Expenditure x Multiplier AE Line Using the same method, the multiplier for the second economy is _ 20 40 60 20 100 120 140 160 180 200 REAL GDP (Billions of dollars)