(Advanced analysis)Answer the question on the basis of the following information for a private open economy.The letters Y,C,I_g,X,and M stand for GDP,consumption,gross investment,exports,and imports respectively.Figures are in billions of dollars. $\begin{array} { l } C = 26 + 0.75 Y \ I _ { g } = 60 \ X = 24 \ M = 10 \end{array}$ The multiplier for the economy is: A) 4.6. B) 3.33. C) 5.0. D) 4.0.

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Quizplus · Accepted Answer

The multiplier is calculated as 1/(1-MPC), where MPC is the marginal propensity to consume. Here, MPC is 0.75, so the multiplier is 1/(1-0.75) = 4.0.

(Advanced Analysis)Answer the Question on the Basis of the Following C=26+0.75YIg=60X=24M=10\begin{array} { l } C = 26 + 0.75 Y \\I _ { g } = 60 \\X = 24 \\M = 10\end{array}C=26+0.75YIg​=60X=24M=10​

(Advanced Analysis)Answer the Question on the Basis of the Following $\begin{array} { l } C = 26 + 0.75 Y \\I _ { g } = 60 \\X = 24 \\M = 10\end{array}$