Problem
1. If planned gross investment is $100 billion, expected government expenditures are $300 billion (as are expected taxes), and 3/4 of all disposable income is spent on consumption (APC = MPC = 3/4), what is equilibrium GNP? (Hint: See text Appendix B for examples of such calculations.)
2. If planned gross investment is $150 billion, government expenditures are $600 billion (while taxes are only $500 billion), and the consumption function is C = $200 + 4/5 Υd, what is equilibrium GNP?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.