Suppose in 2016, real GDP was $160 trillion. Suppose further that the marginal propensity to consume was 0.75 and the marginal propensity to import was 0.25. Using the Keynesian multiplier, how much should government purchases be changed if policymakers attempt to raise real GDP to $180 trillion by changing government purchases?

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The Answer of Suppose in 2016, real GDP was $160 trillion. Suppose further that the marginal propensity to consume was 0.75 and the marginal propensity to import was 0.25. Using the Keynesian multiplier, how much should government purchases be changed if policymakers attempt to raise real GDP to $180 trillion by changing government purchases?

Suppose in 2016, Real GDP Was $160 Trillion