Assume that the economy's marginal propensity to expend is 0.6, the initial baseline level of autonomous spending is $4000 billion, a one percentage point increase in the real interest rate will reduce the sum of investment and gross exports by $100 billion the inflation rate is 2%, and the LM curve is Y=$1500 + $1000 x (r + )
-The equilibrium level of real GDP would be

Question

Assume that the economy's marginal propensity to expend is 0.6, the initial baseline level of autonomous spending is $4000 billion, a one percentage point increase in the real interest rate will reduce the sum of investment and gross exports by $100 billion the inflation rate is 2%, and the LM curve is Y=$1500 + $1000 x (r +    )
-The equilibrium level of real GDP would be

Quizplus · Accepted Answer

The equilibrium level of real GDP is determined where aggregate demand equals aggregate supply. Without additional context or data, it's assumed that $8700 billion is the correct equilibrium level based on typical economic models or given data.

Assume That the Economy's Marginal Propensity to Expend Is 0