If net exports increase by 100 and the mpc is 0.75,equilibrium aggregate output increases by
A)100.
B)250.
C)400.
D)750.

Name: If net exports increase by 100 and the mpc is 0.75,equilibrium aggregate output increases by A)100. B)250. C)400. D)750.
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Quizplus · Accepted Answer

The multiplier is calculated as 1/(1-mpc), which in this case is 1/(1-0.75) = 4. Therefore, an increase in net exports of 100 leads to an increase in equilibrium aggregate output of 100 * 4 = 400.

If Net Exports Increase by 100 and the Mpc Is