--%>

Multiplier for private closed economy

For private closed economy, the data of columns 1 & 2 of the below table is given. Determine multiplier in this example?

1279_Private closed economy.png

E

Expert

Verified

Since each rise of $50 billion in GDP raise aggregate expenditures by $40 billion, the MPC is .8 and so the multiplier is 5.

   Related Questions in Finance Basics

  • Q : Determine the level of real output in

    Normal 0 false false

  • Q : Define Legislature Legislature,

    Legislature, California: Two-house bodies of elected representatives vested with the accountability and power to make laws affecting the state (that is, except as limited by the veto power of the Governor).

  • Q : Describe equilibrium price and quantity

    Assume the market for widgets can be described by the given equations:                     Demand: P = 10 - Q             &

  • Q : Influence of mergers on fees assessed

    What influence have mergers had on fees assessed for retail bank services? The effect is not clear. Market conditions and the level of competition often determine the cost for retail bank services.

  • Q : Financial crisis during 1997-1998

    Describe the Financial crisis during the time period of 1997-1998 ?

  • Q : Describe the sales forecasting procedure

    Describe the sales forecasting procedure.This is a group effort. Usually sales and marketing personnel provide assessments of demand and the competition. Usually, production personnel provide estimates of manufacturing capacity and other product

  • Q : Explain Section 26.00 Section 26.00 :

    Section 26.00: It is a Control Section of Budget Act which gives the authority for the transfer of funds from one class, program or function in a schedule to the other category, program or function in the similar schedule, subject to particular limita

  • Q : Describe significance of excess reserves

    Normal 0 false false

  • Q : Define General Fund General Fund (GF):

    General Fund (GF): For lawful basis accounting and budgeting aims, the predominant fund for the financing state government programs, employed to account for revenues that are not particularly designated to be accounted for by another fund. The main so

  • Q : Resources flow Normal 0 false false

    Normal 0 false false