Incorrect Question 7 0 1 pts Assume the MPC 080 Assume that

Incorrect Question 7 0/ 1 pts Assume the MPC = 0.80. Assume that positive expectations of the future has caused businesses to increase investment spending by $30 billion. What is the overall change in the economy\'s rGDP in the short run after that investment spending has made its rounds in the economy? (remember: multiplier). $150 billion $37.5 billion $30 billion $24 billion

Solution

anwer is 150 billion

k=1/1-mpc

k=1/1-.80

k=5

k =change in income/change in consumption

k=change in income/30

5*30=change in income

change in income/GDP= 150 billon