Statistics Help
Question: Assume that the multiplier in a country is equal to 4 and that autonomous real consumption spending is $1 trillion. If current real GDP is $12 trillion, the current value of real consumption spending is what? Edit
Answer: The multiplier=4,means 1/1-MPC=4
1-MPC= 1/4
MPC= 3/4= 0.75
Consumption function without tax= C=a+bY (a= autonomous consumption, b= MPC, Y= current real GDP)
C= 1 + 0.75 (12)
C=10=real consumption spending Edit
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