Suppose the consumption function is
C = $800 billion + 0.8Y
and the government wants to...
Mathematics, 17.01.2021 20:40 zhangyixing1
Suppose the consumption function is
C = $800 billion + 0.8Y
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 $50 billion increase in government purchases?
$
billion
b. A $50 billion tax cut?
$
billion
c. A $50 billion increase in income transfers?
$
billion
What will the cumulative AD shift be for
d. The increased government spending?
$
billion
e. The tax cut?
$
billion
f. The increased transfers?
$
billion
Answers: 2
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