Using the Table Below, Answer the Following Questions

question 101

Essay

Using the table below, answer the following questions. The numbers in the table are in billions of dollars.

a.What is the equilibrium level of real GDP?
b.What is the MPC?
c.If potential GDP is $4 000, is the economy at full employment? If not, what is the condition of the economy?
d.If the economy is not at full employment, by how much should government spending increase so that the economy can move to the full employment level of GDP?
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Definitions:

Capital Stock

The total amount of physical, financial, and human capital available in an economy, used to produce goods and services.

Gross Investment

The total amount of investment spent on new fixed investment plus replacement investment, without accounting for depreciation.

Net Investment

The total amount invested in buying new capital and replacing depreciated capital within a specific period.

Potential Output

The highest level of real GDP that can be sustained over the long term without increasing inflation, reflecting the maximum productive capacity of an economy.