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Please answer the following questions what is the value of

Income Determination

The following information describes a hypothetical economy (assume all numbers are in billions, if necessary).

C = 100 + 0.75 DI I_g = 875 G = 925 X_n = -150

Please answer the following questions:

1. What is the value of the MPC of this economy? Explain.

2. Determine the value of the multiplier of this economy.

3. Determine the value of the equilibrium GDP (Y) in this economy.

4. What is the level of consumption in the economy?

5. What is savings in the economy?

6. What will be the effect on equilibrium GDP (Y) and consumption (C) if government spending (G) increases by 50?

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