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What is the effect on real GDP of a ​$175 billion change in planned investment if the MPC is 0.50​? ​$ nothing billion. ​(Enter your response rounded to the nearest whole​ number.)

Respuesta :

The effect on real GDP of a $175 billion in the case when there is a change in the planned investment should be $350 billion.

Calculation of the effect on real GDP:


As we know that

Multiplier = 1 ÷ (1 - MPC)
= 1 ÷ 1-0.50
= 2

Now

Change in GDP = Multiplier × Change in investment
= 2 × 175
= $350 billion

Therefore for computing the Change in GDP we simply applied the above formula i.e of Multiplier and the change in gross domestic product (GDP)

Hence, The effect on real GDP of a $175 billion in the case when there is a change in the planned investment should be $350 billion.

Learn more about GDP here: https://brainly.com/question/24317041

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