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Suppose a government is established in a country where none previously existed. The government spends 80, financed by borrowing, to provide public services. If autonomous consumption plus investment is 210 and the marginal propensity to consume MPC = 0.8, what are the equilibrium real GDP values before and after the government is established?

a) What is the equilibrium real GDP value before the government is established?

b) What is the equilibrium real GDP value after the government is established?

Econometrics, Economics

  • Category:- Econometrics
  • Reference No.:- M9695642

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