Calculate gdp loss and government expenditure needed

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Reference no: EM13157603

1. Calculate GDP loss and government expenditure needed to eliminate this loss if full employment GDP is $400, unemployment rate 8.9%, and the MPC is 0.8.

2. Calculate MPC, MPS and the Multiplier if consumption expenditure increases by $3,150 as a result of increase in income from $40,000 to $44,200.

3. Assume that initially G is $80 and equilibrium real GDP is $5000. If the multiplier is 4, what would be the new equilibrium level of GDP if G increase to $200.

Reference no: EM13157603

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