SCure! 0.8 of 1 pt 4 of 15 (13 complete) Text Problem 4.5a You are given the fol
ID: 1103695 • Letter: S
Question
SCure! 0.8 of 1 pt 4 of 15 (13 complete) Text Problem 4.5a You are given the following data concerning Freedonia, a legendary country . Consumption function: C 100+0.60Y · Investment function: 200 ·Aggregate expenditure function: AE-C+ 1 * Equilibrium: AE Y The MPC in Freedonia is 0.6. (Round your response to two decimal places) The MPS in Freedonia is 0.4. (Round your response to two decimal placos.) The level of equilibrium income, Y. is $ 750. (Enter your response The value of the investment multiplier is 2.5. (Round your response to two decimal places) Suppose the level of investment increases by $5. The change in the level of equilibrium income if investment increases by $5 is s(Round your response to two decimal places.) as an integer.)Explanation / Answer
All the filled values are absolutely correct.
Change in level of equilibrium income= multiplied*change in investment
= 2.5*5=12.5
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