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Question # 6 The MPC for a closed economy is 0.75. Autonomous consumption is $500, investment is $300, and government spending is $400. a) What

Question # 6

The MPC for a closed economy is 0.75. Autonomous consumption is $500, investment is $300, and government spending is $400.

a) What is the equilibrium level of real GDP?

b) If a business increases planned investment expenditure by 300 to 400, what is the new equilibrium

real GDP?

c) What is the slope of the AE function in this economy and the multiplier value?

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