Real GDP
(Y)

Consumption
(C)

Planned
Investment
(I)

Government
Expenditures...

Question

Real GDP
  (Y)

Consumption
  (C)

Planned
 Investment
  (I)

Government
 Expenditures or
 Purchases
  (G)

Net Exports
  (NX)

$ 8,000

$ 7, 300

$ 1,600

$ 400

-$ 500

9,000

8,100

1,600

400

-500

10,000

8,900

1,600

400

-500

11,000

9,700

1,600

400

-500

12,000

10,500

1,600

400

-500

a.
What is the equilibrium level of GDP? Show it with the help of a graph.
b.
Calculate Savings,MPC, MPS, multiplier, and autonomous consumption.
c.
Suppose investment expenditures increase by $ 400 billion. What will be the new
equilibrium level of GDP? Use the multiplier formula to determine your answer.

David · Accepted Answer

Real 
GDP (Y)
Consumption 
(C) 
Planned 
Investment 
(I) 
Government 
Expenditures  
(G) 
Net 
Exports 
(NX) 
$ 8,000 $ 7, 300 $ 1,600 $ 400 -$ 500 
9,000 8,100 1,600 400 -500 
10,000 8,900 1,600 400 -500 
11,000 9,700 1,600 400 -500 
12,000 10,500 1,600 400 -500 
a. What is the equilibrium level of GDP? Show it with the help of a graph. 
Answer:

Real GDP (Y) Consumption (C) Planned Investment (I) Government Expenditures or Purchases (G) Net Exports (NX) $ 8,000 $ 7, 300 $ 1,600 $ 400 -$ 500 9,000 8,100 1,600 400 -500 10,000 8,900 1,600 400...

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Real GDP (Y)	Consumption (C)	Planned Investment (I)	Government Expenditures or Purchases (G)	Net Exports (NX)
$ 8,000	$ 7, 300	$ 1,600	$ 400	-$ 500
9,000	8,100	1,600	400	-500
10,000	8,900	1,600	400	-500
11,000	9,700	1,600	400	-500
12,000	10,500	1,600	400	-500