Suppose the consumption function is C-$700 billion+08Y and the government wants to stimulate the economy. By how much will aggregate demand at current prices shift initially before multiplier effects) with Instructions: Enter your responses as a whole number a a $30 billion increase in government purchases? 30 billion b. a $30 billion tax cut? 24 billion c. a $30 billion increase in income transfers? 24 billion What will the cumulative AD shift (after multiplier effects) be for d. the increased government spending? billion e. the tax cut? billion f the increased transfers? billion

Suppose the consumption function is C-$700 billion+08Y and the government wants to stimulate the economy. By how much will aggregate demand at current prices shift initially before multiplier effects) with Instructions: Enter your responses as a whole number a a $30 billion increase in government purchases? 30 billion b. a $30 billion tax cut? 24 billion c. a $30 billion increase in income transfers? 24 billion What will the cumulative AD shift (after multiplier effects) be for d. the increased government spending? billion e. the tax cut? billion f the increased transfers? billion

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter9: Aggregate Demand

Section: Chapter Questions

Problem 5.11P

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