assume that the mps in an economy is equal to 0.30. the multiplier must be equal to 3.33. you have…

assume that the mps in an economy is equal to 0.30. the multiplier must be equal to 3.33. you have established that the multiplier is 3.33. now assume that autonomous real consumption is $3 trillion. there is no other autonomous spending presently taking place in the economy. at what level is consumption equal to real gdp? $10.00 trillion. (round your answer to two decimal places) you have established that the multiplier is 3.33 and that autonomous real consumption is $3 trillion. there is autonomous investment of $2 trillion and autonomous net exports of $8 trillion. at what level are expenditures equal to real gdp? $ trillion. (round your answer to two decimal places)

assume that the mps in an economy is equal to 0.30. the multiplier must be equal to 3.33. you have established that the multiplier is 3.33. now assume that autonomous real consumption is $3 trillion. there is no other autonomous spending presently taking place in the economy. at what level is consumption equal to real gdp? $10.00 trillion. (round your answer to two decimal places) you have established that the multiplier is 3.33 and that autonomous real consumption is $3 trillion. there is autonomous investment of $2 trillion and autonomous net exports of $8 trillion. at what level are expenditures equal to real gdp? $ trillion. (round your answer to two decimal places)

Answer

Explanation:

Step1: Recall the aggregate - expenditure formula

The formula for equilibrium real GDP ($Y$) in a simple Keynesian model with no government and no taxes is $Y = \frac{a + I+NX}{1 - MPC}$, where $a$ is autonomous consumption, $I$ is autonomous investment, $NX$ is net - exports, and $MPC$ is the marginal propensity to consume. Also, the multiplier ($k$) is given by $k=\frac{1}{1 - MPC}$. Given $k = 3.33=\frac{1}{1 - MPC}$, we can find $MPC = 1-\frac{1}{k}=1 - \frac{1}{3.33}\approx0.70$.

Step2: Calculate equilibrium real GDP for the first case

We know that $a = 3$ trillion, $I = 2$ trillion, $NX=3$ trillion, and $k = 3.33$. The sum of autonomous spending ($A$) is $A=a + I+NX=3 + 2+3=8$ trillion. Using the formula $Y=k\times A$, we substitute the values: $Y = 3.33\times8 = 26.64$ trillion.

Step3: Calculate equilibrium real GDP for the second case

We know that $a = 3$ trillion, and there is no other autonomous spending ($I = 0$, $NX = 0$). Using the formula $Y=k\times a$, with $k = 3.33$ and $a = 3$ trillion, we get $Y=3.33\times3 = 9.99$ trillion.

Answer:

26.64 trillion; 9.99 trillion