Table 23-14 -Refer to Table 23-14

question 166

Essay

Table 23-14
$$\begin{array} { | c | c | c | c | c | } \hline \text { Real GDP } & \text { Consumption } & \begin{array} { c } \text { Planned } \\\text { Investment }\end{array} & \begin{array} { c } \text { Government } \\\text { Purchases }\end{array} & \text { Net Exports } \\\hline \$ 1,000 & \$ 1,000 & \$ 100 & \$ 150 & - \$ 50 \\\hline 2,000 & 1,900 & 100 & 150 & - 50 \\\hline 3,000 & 2,800 & 100 & 150 & - 50 \\\hline 4,000 & 3,700 & 100 & 150 & - 50 \\\hline\end{array}$$
-Refer to Table 23-14.Using the table above,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 billion,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:

Oedipus Complex

A Freudian concept asserting that a child experiences unconscious desire for the opposite-sex parent and jealousy towards the same-sex parent, typically between the ages of three and five.

Electra Complex

A psychoanalytic theory proposing a girl's psychosexual competition with her mother for possession of her father.

Anal Fixation

A term from psychoanalytic theory indicating an obsession with anal-stage tasks like control, cleanliness, or order, often stemming from early childhood.

Oral Fixation

A concept in psychoanalytic theory referring to an obsession with oral activities like sucking or eating, stemming from unresolved issues in the oral stage of psychosexual development.