In 2007, investment in France increased by 7 billion euros. Assume the price level was constant, the multiplier was 5 and the economy was at full employment. As a result, equilibrium expenditure

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The multiplier effect can be calculated as ΔY = kΔI, where ΔY is the change in equilibrium expenditure, k is the multiplier (in this case, 5), and ΔI is the change in investment (in this case, 7 billion euros). Therefore, ΔY = 5(7 billion) = 35 billion euros. Since the economy is at full employment and assuming the price level is constant, the entire increase in equilibrium expenditure will result in an increase in real GDP by the same amount - 35 billion euros.

In 2007, Investment in France Increased by 7 Billion Euros