If equilibrium income is $400 billion,MPC = 0.9,and autonomous investment increases $40 billion,equilibrium income will be

Name: If equilibrium income is $400 billion,MPC = 0.9,and autonomous investment increases $40 billion,equilibrium income will be
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The multiplier is 1/(1-MPC) = 1/0.1 = 10. The change in equilibrium income is the multiplier times the change in investment: 10 * $40 billion = $400 billion. Adding this to the initial equilibrium income of $400 billion gives $800 billion.

If Equilibrium Income Is $400 Billion,MPC = 0