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Calculation of Multiplier and change in investment in a closed economy.

In a closed economy without a government sector, consumption is determined as 80% of the income available to households. Investment is autonomous at a level of £450.

A. Compute the value of the multiplier, given the change in investment.

B. describe, as if you were describeing to your (non-economist) grandparents what is the meaning of that multiplier you found in c).

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M921579

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