a) If G = 26,000, what is w?
b) If G = 26,000, what is Y?
c) If G rises to 26,400, what is Y?
d) What is the government spending multiplier when G increases to 26,400 from 26,000?
Suppose the economy's production function is Y = A(300N - N^2) and MPN = A(300-2N). Suppose that A = 10. The supply of labor is NS = 0.05w + 0.005G.