Question : Use the following data to calculate equilibrium real GDP : 2141661
26) What is the multiplier effect?
27) What is the multiplier? If MPC = 0.75, what is the value of the multiplier in the simple model of the economy?
28) Use the following data to calculate equilibrium real GDP: C = 0.75Y, I = $2 trillion, G = $1 trillion and NX = -$0.5 trillion.
29) Explain how an increase in real interest rates affects the components of aggregate expenditure.
30) What is the inflation gap? What is the output gap?