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Question: Fill in the missing cells to raise national income by $100. Assuming MPC = 0.8  It the current le...

Show transcribed image text Fill in the missing cells to raise national income by $100. Assuming MPC = 0.8 It the current level of equilibrium GDP is $5000 and the MPS is 0.2, an increase in planned investment of $50 will change equilibrium GDP to _$___. An economy lacking a government sector and international trade is in equilibrium at $1250. Full-employment GDP is $1550 and the marginal propensity to consume is 0.67. Cyclical unemployment can be eliminated from this economy if planned investment ___ (increases of decrease) by _$___. If the multiplier is 4, the marginal propensity to save is ___. Suppose consumption, investment, government, and net exports in the economy are given the following equations: C = 150 + 0.75 (Y): I = 250; G = 50; X = 45; IM = 60 a. What is the equilibrium real GDP in this model? b. Assuming the full-employment GDP level is $2000. Is this economy in recessionary or inflationary GDP gap? c. What should G spending be in order to achieve full-employment? d. Alternatively, how much T should be cut in order to achieve full-employment?

Fill in the missing cells to raise national income by $100. Assuming MPC = 0.8 It the current level of equilibrium GDP is $5000 and the MPS is 0.2, an increase in planned investment of $50 will change equilibrium GDP to _$___. An economy lacking a government sector and international trade is in equilibrium at $1250. Full-employment GDP is $1550 and the marginal propensity to consume is 0.67. Cyclical unemployment can be eliminated from this economy if planned investment ___ (increases of decrease) by _$___. If the multiplier is 4, the marginal propensity to save is ___. Suppose consumption, investment, government, and net exports in the economy are given the following equations: C = 150 + 0.75 (Y): I = 250; G = 50; X = 45; IM = 60 a. What is the equilibrium real GDP in this model? b. Assuming the full-employment GDP level is $2000. Is this economy in recessionary or inflationary GDP gap? c. What should G spending be in order to achieve full-employment? d. Alternatively, how much T should be cut in order to achieve full-employment?