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Summer asked in Social ScienceEconomics · 2 months ago

FInd multiplier and equilibrium real GDP ?

The answer is M is 1.7, equilibrium real GDP is 652. Can anyone explain this?

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1 Answer

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  • Oiy
    Lv 7
    1 month ago

    First, C or MPC= 75/100=0.75

    Second is NT, the marginal is10/100=0.1

    The last one is Im, the marginal is 25/100=.25

    The multiplier is 1/ (1- (.75+.1-.25)=1/0.6=1.7

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