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In a closed​ economy, consumers spend ​$200 regardless of the level of​ income, and the marginal propensity to consume​ (MPC) is 0.75. Investment is equal to ​$250. The government spends ​$300 and collects ​$150 in taxes. The equilibrium level of GDP in this economy is $ ___?

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TomShelby

Answer:

GDP 600

Explanation:

consumption             200

goverment spending 300

taxes                           (150)

investment                  250  

Total:                          600

The marginal propensity to consume can be ued to derive whats the GDP level if governemtn increase spending or taxes with the governement spending multiplier But, we are given with the value here thus, we do no use of it

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