# Economics

The value of the marginal propensity to save is 0.2. If real GDP increases by \$50 billion, this situation was the result of an increase in the aggregate expenditures schedule of:
a. \$10 billion
b. \$15 billion
c. \$16 billion
d. \$40 billion

Take a shot. Hint, calculate a multiplier.

1. 👍 0
2. 👎 0
3. 👁 164
1. a.\$10 billion

1. 👍 0
2. 👎 0
posted by Lucky

## Similar Questions

1. ### Macro Help

Calculating Marginal Propensity to Save and Marginal Propensity to Consume Consider the following table. For this hypothetical economy, the marginal propensity to save is constant at all levels of real GDP, and investment spending

asked by animal on May 12, 2008
2. ### Macroeconomics

If the marginal propensity to consume is 2/3, and there is no investment accelerator or crowding out, what would happen to AD or AS, the price level (P) and the real GDP (Y) if government expenditures increases by \$20 billion?

asked by Sarah on May 29, 2008

Given the increase in government expenditures and the marginal propensity to consume, how would you find the change in equilibrium GDP? I did the expenditures X the marginal propensity but this is wrong.

asked by Hannah on April 21, 2012
4. ### macroeconomics

gov. increases expenditures by \$100 billon and marginal propensity to consume is 0.50 by how much will equilibrium gdp charge

asked by dixie on April 22, 2012
5. ### economics

At an initial point on the aggregate demand curve, the price level is 100, and real to GDP is \$15trillion. After the price level rises to 110, however, there is an upward movement along the aggregate demand curve, and real GDP

asked by Tina on July 9, 2011
6. ### Macroeconomics

Suppose the marginal propensity to consume is 0.75. What does this mean? What do we know about the marginal propensity to save? What do we know about the average propensity to consume? The marginal propensity to consume (MPS) the

7. ### Economics

Suppose that the MPC = 0.8 and that \$12 trillion of real GDP is currently being demanded. The government wants to increase real GDP demanded to \$13 trillion. By how much would it have to increase government spending to achieve

asked by jay on September 20, 2006
8. ### macroeconomics

is this a recessionary or inflationary gap. aggregate supply curve is horizontal, change in real GDP arising from a shift of the aggregate demand curve = the size of the shift of the curve. Calculate both the change in government

asked by Jacqui on March 22, 2010
9. ### Econ

Need help on this question, I tried the ones i know. a The consumption function is C = 1.5 + 0.75(Y-T). What is the marginal propensity to consume, MPC? What is the marginal propensity to save, MPS? ans: MPC=0.75 and

asked by Bo on July 21, 2008
10. ### economics

Suppose that Congress enacts a lump-sum tax cut of \$750 billion. The marginal propensity to consume is equal to .075. Assuming that Ricardian equivalence holds true, what is the effect on equilibrium real GDP? On saving?

asked by Tina on July 9, 2011

More Similar Questions