Assume that people will spend $0.60 of every extra dollar they earn. Further assume that the real interest rate decreases, and this causes gross private investment to increase by $75 billion. Determine the change in aggregate demand.
Assume that people will spend $0.60 of every extra dollar they earn. Further assume that the real interest rate decreases, and this causes gross private investment to increase by $75 billion. Determine the change in aggregate demand.
Chapter19: The Keynesian Model In Action
Section: Chapter Questions
Problem 17SQ
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