with-an-mpc-of-07-what-is-the-multiplier-and-how-would-a-50-billion-increase-in-

Question

With an MPC of 0.7, what is the multiplier, and how would a $50 billion increase in net exports affect GDP?

Accepted Answer

The multiplier is 3.33, and GDP would increase by $166.5 billion.

Answer

The multiplier is 5, and GDP would increase by $250 billion.

Answer

The multiplier is 4, and GDP would increase by $200 billion.

Answer

The multiplier is 2.5, and GDP would increase by $125 billion.

With an MPC of 0.7, what is the multiplier, and how would a \$50 billion increase in net exports affect GDP?