Question 65 An article published in an economics journal found the following: "For the poorest households, the marginal propensity to consume was close to 70%. For the richest households, the MPC was only 35% Assume that the macroeconomy can be divided into three groups. Group A consists of the poorest households, Group B consists of the richest households, and Group C consists of all other households. Assume that there is an increase in planned investment of $40 billion. Compute the change in equilibrium real GDP if the MPC for the economy is 35 percent (or 0.35). S513 billion $114.29 billion O $54.00 billion $61.54 billion
Question 65 An article published in an economics journal found the following: "For the poorest households, the marginal propensity to consume was close to 70%. For the richest households, the MPC was only 35% Assume that the macroeconomy can be divided into three groups. Group A consists of the poorest households, Group B consists of the richest households, and Group C consists of all other households. Assume that there is an increase in planned investment of $40 billion. Compute the change in equilibrium real GDP if the MPC for the economy is 35 percent (or 0.35). S513 billion $114.29 billion O $54.00 billion $61.54 billion
Chapter11: Managing Aggregate Demand: Fiscal Policy
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Pls help with below two homework. Select the correct option and explain it in 7-8 sentences. Pls solve both parts to get the positive rating.
![Question 65
An article published in an economics journal found the following "For the poorest
households, the marginal propensity to consume was close to 70%. For the richest
households, the MPC was only 35% Assume that the macroeconomy can be divided
into three groups. Group A consists of the poorest households, Group B consists of
the richest households, and Group C consists of all other households. Assume that
there is an increase in planned investment of $40 billion. Compute the change in
equilibrium real GDP if the MPC for the economy is 35 percent (or 0.35)
$513 billion
$114.29 billion
$54.00 billion
$61.54 billion
Price
vet
LAS,
LRAS
SRAS,
115
12
144 14
Reat GoP
ione ot doar
Refer to the figure above. Given the economy is at point A in year 1. what is the
inflation rate between year 1 and year 2?
1.8%
0.9%
2.7%
3.0%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F56b8c67a-bcab-42db-8221-ed2b7930ce3a%2F309ea1ee-04cb-4e12-b813-ca925f6d83f9%2Fm8tz2r_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Question 65
An article published in an economics journal found the following "For the poorest
households, the marginal propensity to consume was close to 70%. For the richest
households, the MPC was only 35% Assume that the macroeconomy can be divided
into three groups. Group A consists of the poorest households, Group B consists of
the richest households, and Group C consists of all other households. Assume that
there is an increase in planned investment of $40 billion. Compute the change in
equilibrium real GDP if the MPC for the economy is 35 percent (or 0.35)
$513 billion
$114.29 billion
$54.00 billion
$61.54 billion
Price
vet
LAS,
LRAS
SRAS,
115
12
144 14
Reat GoP
ione ot doar
Refer to the figure above. Given the economy is at point A in year 1. what is the
inflation rate between year 1 and year 2?
1.8%
0.9%
2.7%
3.0%
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