Monary 2

Monary 2. Consider the following sets of values for MPC, Land and recall that the implemtiplier is given by 2-11-MPCE1-4) -m] Anume the AS curveis perd sloping and identical in chemy Economy ? B ? D E 1 0.15 0.40 MIC 0.84 0.84 093 0.75 0.75 0.15 m 0.19 0.19 0.12 0.27 0.30 0.30 0.10 For each economy, calculate the simple multiplies b Which economy would experience the largest wings in real GDP in response to a given AD shocke Which would experience the smallest wwwgs? Compare Economies A and B and explain how the tax an transfer system provides greater automatic stabilization in one of the two economics d. Explain how the slope of the AS curve would affect the short run change in real GDP in response to an AD shock