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real gdp
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ahlashi
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real gdp
governtment purchases rises by 100$ and MPC=.80
ASSUMING IDLE RESOURCES EXIST AT each ependiture round and the multiplier is operative.
Change in real GDP equals ?
ANS ; 500$
i am not getting the correct answer pls help
Dr. Strange
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Re: real gdp
Y = C + G + cY
Y= (C+G)/(1-c)
dY = dG/(1-c)
c= 0.8, dG=100 so dY =500
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