Suppose for Every Dollar Change in Household Wealth,consumption Expenditures Change

Essay

Suppose for every dollar change in household wealth,consumption expenditures change by $0.10.If real household wealth increases by $200 billion and potential GDP is $950 billion,what is the total change in output relative to potential for:
a. the first year,if the multiplier effect for the first year after an expenditure shock is 1.7?
b. the second year,if the multiplier effect for the second year after an expenditure shock is 1.3?
c. the third year,if the multiplier effect for the third year after an expenditure shock is 0.9?