The multiplier - calculating hypothetical changes in GDP
Go to the Bureau of Economic Analysis at https://www.bea.gov, and use the BEA interactivity feature to select National Income and Product Account Tables. Then find Table 1.1.5, which contains the most recent quarterly values for GDP = Ca+Ig+G+(X-M). What is the most recent quarter for which data is available? Assume that the MPC is .75 and that, for each of the following, the values of the initial variables are those you just discovered. Determine the new value of GDP if, other things equal, (a) investment increased by 5 percent, (b) imports increased by 5 percent while exports increased by 5 percent, (c) consumption increased by 5 percent, and (d) government spending increased by 5 percent Make a table showing both the origional values and the new values you have calculated. Which of the changes, (a) through (d), cause the greatest change in GDP in absolute dollars? showing both the origional values and the new values you have calculated. Which of the changes, (a) through (d), cause the greatest change in GDP in absolute dollars?