These 3 questions please Quiz Assignment 6 Chapter 8 This Qu

These 3 questions please

Quiz: Assignment 6 (Chapter 8) This Question: 1 pt | 8 of 10 (8 complete) This Quiz: 10p Complete the table. Planned Gov\'t Planned Unplanned Real GDP Consumption Investment Purchases Exports Aggregate Change in (NX) Expenditure Inventories Net 58.000 9,000 6,850 10,000 7500 11.000 8.150 12,000 8,800 6,200 $1.675 1,675 1,675 1,675 1675 $1.675 $500 ,675 $500 9,700 1.675 ·5500 1,675 $500 11000 1675 $500 11650 The equilbrium level of real GDP is S?

Solution

RGDP

C

I

G

NX

AE

Unplanned Change in Inventories

MPC

8000

6200

1675

1675

-500

9050

-1050

9000

6850

1675

1675

-500

9700

-700

0.65

10000

7500

1675

1675

-500

10350

-350

0.65

11000

8150

1675

1675

-500

11000

0

0.65

12000

8800

1675

1675

-500

11650

350

0.65

The real GDP = $11000

a. The real GDP = 10 trillions

b. MPC = Change in GDP/Change in AE

R

C

MPC

8.00

8.40

10.00

10.00

0.80

12.00

11.80

0.90

Average of MPC = 0.85

c. Multiplier = 1/(1-MPC) = 1/(1-0.85) = 1/0.15 = 6.7

RGDP	C	I	G	NX	AE	Unplanned Change in Inventories	MPC
8000	6200	1675	1675	-500	9050	-1050
9000	6850	1675	1675	-500	9700	-700	0.65
10000	7500	1675	1675	-500	10350	-350	0.65
11000	8150	1675	1675	-500	11000	0	0.65
12000	8800	1675	1675	-500	11650	350	0.65