Inan economy with no government and no foreign sectors, autonomous consumer spending is $250 billion, planned investment

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Inan economy with no government and no foreign sectors, autonomous consumer spending is $250 billion, planned investment spending is i $350 bi and the marginal propensity to consume is 2/3.

a. Plot the aggregate consumption function and planned aggregate spending.

b. What is unplanned inventory investment when real GDP equals $600 billion?

c. What is Y*, income—expenditure equilibrium GDP?

d. What is the value of the multiplier?

e. If planned investment spending rises to $450 billion, what will be the new Y*?

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Economics

ISBN: 9781319181949

5th Edition

Authors: Paul Krugman, Robin Wells

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Question Posted: Nov 18, 2024 04:02 AM

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Inan economy with no government and no foreign sectors, autonomous consumer spending is $250 billion, planned investment

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Economics

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