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(Simple Spending Multiplier) Suppose that the MPC is 0.8, while investment, government purchases, and

net exports sum to $500 billion. Suppose also that the government budget is in balance.
a. What is the sum of saving and net taxes when desired spending equals real GDP? Explain.
b. What is the value of the multiplier?
c. Explain why the multiplier is related to the slope of the consumption function.

I need to know how to work it out but also including the answer

1 answer

What is the sam of savings and net taxes when desired spending equals to real GDP? Explain.
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