Ask Question
1 November, 00:55

A. by how much will gdp change if firms increase their investment by $11 billion and the mpc is 0.9?

+2
Answers (1)
  1. 1 November, 04:42
    0
    The answer is "$110 billion".

    Explanation:

    Firms increase their investment by $11 billion

    mpc = 0.9

    gdp = ?

    To find the gdp, first we have to find expenditure multiplier;

    we will find that by using the formula;

    expenditure multiplier = 1 / (1-0.9) = 1/0.1 = 10

    Now gdp = 10 x $11 billion

    = $110 billion

    Thus the gdp is $110 billion.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “A. by how much will gdp change if firms increase their investment by $11 billion and the mpc is 0.9? ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers