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In each of the following cases, calculate the values of MPC, MPWT and the spending multiplier. Enter your responses below rounded to 2 decimal places.
In each of the following cases, calculate the values of MPC, MPWT and the spending multiplier. Enter your responses below rounded to 2 decimal places. a. A $5 million increase in income leads to a $1,500,000 rise in consumption on domestic 'rtems. MPC is therefore ,MPW is and the spending multiplier is _ b. A $7 million decrease in income results in a $0.7 million drop in consumption on domestic items. MPC is therefore |:| , MPW is and the spending multiplier is . c. A $3 million decrease in income causes a $2.1 million drop in withdrawals. MPC is therefore |:|, MPW is |:| and the spend'ng multiplier is _ A decrease in government purchases of $5 billion leads to an initial $3.5 billion decrease in withdrawals. a. In this case MPW is 7, MPC is , and the spending multiplier in this economy is Enter your responses for marginal propensitles and multiplier values rounded to 2 decimal places. b. With this change in government purchases the AD curve shifts to the (Click to select) | by $ billion. Enter your response for the size of the curve shift rounded to 1 decimal place. Do not put a minus sign In your answer. c. As a result of this shift the equilibrium price level will (Click to select) | and equilibrium real output will (Click to select) vIn each of the following cases, calculate the values of MPC, MPW, and the spending multiplier. Enter your responses below rounded to 2 declmal places. a. A $1 million increase in income leads to a $350,000 rise in consumption on domestic items. MPC is therefore -, MPW is and the spending multiplier is b. A $4 million decrease in income results in a $1 million drop in consumption on domestic items. MPC is therefore |:| , MPW is and the spending multiplier is c. A $5 million decrease in income causes a $3 million drop in withdrawals. MPC is therefore |:| , MPW is |:| and the spending multiplier is _ A decrease in government purchases of$8 billion leads to an initial $4.4 billion decrease in withdrawals. a. In this case MPW is :|,MPCis|: , and the spending multiplier in this economy is . Enter your responses for marginal propensities and multiplier values rounded to 2 decimal places. b. With this change in government purchases the AD curve shifts to the left v by $ |:| billion. Enter your response forthe size of the curve shift rounded to 1 decimal place. Do not put a minus sign In your answer. c. As a result ofthis shift the equilibrium price level will decrease v and equilibrium real output will decrease v
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