Troll Island is a small island nation that recently experienced an autonomous change in aggregate expenditures (AE). AE increased by 7 billion, and the marginal propensity to consume on Troll Island is equal to 0.85What is the change in Troll Island's real GDP after the increase in AE?

Change in GDP = $46.62

Explanation:

Multiplier can be used to analyse the multiple times change in GDP due to change in autonomous aggregate expenditure.

Change in income (GDP) = M x Change in Autonomous variable;

where M = Multiplier = 1 / (1 - MPC)

So, Change in Income = [ 1 / (1 - 0.85) ] x 7

( 1 / 0.15 ) x 7

6.66 x 7

= 46.62  [Change in Income (GDP)]

answer; ok in rural area most people depend on private transportation(cars),pick up truck,donkey and buggy: ),and urban people can walk or ride public transportation,bus,train cab,uber.

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