QUESTION 3 1) If government purchases increases by $15 billion, how much would equilibrium output change? (mpc = 0.8) 2) If tax decreases by $10 million, how much would equilibrium output change? (mpc = 0.8) What is the equilibrium level of output in an economy if, C = A+ 08(Y T),A = $200,1 = $350,G = $250,NX = $50, T = $300. What is the equilibrium output in an economy if, consumption schedule, = 1 + 4 : ) ; = (Y 0), gross investment is $2.50, government purchases is $1.50, and net exports is $0. What is the new equilibrium real GDP, if government purchases increases from $10 billion to $75 billion, the initial equilibrium level of real GDP is $100 billion, and the marginal propensity consume is 0.5? An economy is producing $130 billion above the full-employment level of real GDP and the marginal propensity to save in this economy is 0.2. a) Isthe economy experiencing a recessionary gap or an inflationary gap? b) Calculate the recessionary or inflationary gap that the economy is experiencing If the marginal propensity to save in the nation of Candy Floss is 0.4, the tax multiplier is . a) -1.5 b) -0.6. o) 1.5. d) 0.6. Consider the aggregate expenditures model. Investment in Restopia increased from $70 million to $88 million. Assume the marginal propensity to save is 0.1. Assuming all else remains unchanged, this increase in investment will cause the equilibrium level of GDP to ... a) Decrease by $180 million b) Decrease by $20 million ) Increase by $20 million d) Increase by $180 million