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Scilla [17]
3 years ago
6

If the mpc is 0.70 and investment increases by $3 billion, the equilibrium gdp will

Business
1 answer:
Alina [70]3 years ago
7 0
<span>If the MPC is 0.70 and investment increases by $3 billion, the equilibrium GDP will increase by $10 billion. 

The GDP is the Gross Domestic Product and the MPC is the marginal propensity to consume. The MPC tracks that a raise in pay will increase consumers spending on goods and services. If there is an increase in spending budget, then the GDP will increase because of more spending power.
</span>
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Answer:

Instructions are listed below.

Explanation:

Giving the following information:

Selling and administrative expenses consist of $400,000 in annual fixed expenses and $2 per unit in variable selling and administrative expenses. The company's product cost of $30 per unit is computed as follows. Direct materials $ 4 per unit Direct labor $ 16 per unit Variable overhead $ 4 per unit Fixed overhead ($600,000 / 100,000 units) $ 6 per unit.

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Suppose housing prices and stock prices decline significantly and cause autonomous consumption spending to decrease by $200 bill
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To calculate how much the equilibrium real GDP will change:

STEP1: CALCULATE THE MULTIPLIERS

multipliers = 1 ÷ (1 - MPC)

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