Business, 24.03.2020 02:29 dawnejones4013
Suppose the government in this economy decides to decrease government purchases by $300 billion. The decrease in government purchases will lead to a decrease in income, generating an initial change in consumption equal to:
A) -$1,000 billion
B) -$90 billion
C) -$210 billion
D) -$500 billion
E) -$105 billion
This decreases income yet again, causing a second change in consumption equal to:
A) -$1,000 billion
B) -$90 billion
C) -$210 billion
D) -$500 billion
E) -$107 billion
The total change in demand resulting from the initial change in government spending is:
A) -$0.6 trillion
B) -$0.7 trillion
C) -$2.7 trillion
D) -$1 trillion
Answers: 1
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Suppose the government in this economy decides to decrease government purchases by $300 billion. The...
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