Suppose the economy of Yahoo, OH has the following output (real GDP) and spending data:
Real GDP (=DI) C I G (X-M) Planned AE
$0 $250 $160 $300 -$210
$1,000 $1,000 $160 $300 -$210
$2,000 $1,750 $160 $300 -$210
$3,000 $2,500 $160 $300 -$210
$4,000 $3,250 $160 $300 -$210
$5,000 $4,000 $160 $300 -$210
Fill in the ‘Planned AE' column and then find the equilibrium level of real GDP.
Compute the value of the MPC for this economy.
Using your answer to question above, compute the value of the multiplier.
Using your answer to the question above, calculate the amount of the change in the equilibrium level of Real GDP due to a $100 increase in investment expenditures.