What is the value of autonomous spending

Reference no: EM13184020

Keynesian Economics: Suppose the following about the economy of the United States: Government spending = 660, planned investment (Ip) = 215, autonomous consumption is 200, net exports is 100 and taxes are 100. In addition, for each additional $1 of income consumers increase their consumption by $0.75 (MPC). Please answer the following questions.

1)What is the value of the multiplier?

2)What is the value of autonomous spending?

3)What is the equilibrium GDP?

Suppose that currently GDP (Y) is 1,000. What would expect to be happening to inventory levels?
Select one:
Increasing
Decreasing

They are not changing

Reference no: EM13184020

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