1. Consider a nation with the sacrifice ratio according to our PowerPoints.  It wants to reduce its inflation by 20%, spread out evenly over 4 years.  How much will it need to sacrifice GDP each year to do so? 

2. If the government decreases taxes by $200 and people save 32% of each additional dollar earned, what will be the change in income (aggregate demand)?  (Enter a positive number for an increase in income and a negative number for a decrease.)

3. Using the typical estimate of the sacrifice ratio from the PowerPoint, how much GDP (in percentage terms, though you are not to include a percentage sign) must be sacrificed to lower inflation from 7% to 4% in one year?  

4. If the government decreases its spending by $1560 and people in the economy spend 84% of each additional dollar they earn, what will be the change in income (aggregate demand)? (Enter only numbers, a decimal point, and a negative sign if necessary; round your answer to two decimal places. Enter a positive number for an increase in income and a negative number for a decrease.)