The government wants to stimulate the economy. by how much, Ask an Expert

Economics

Suppose the consumption function is C = $500 billion + 0.9Y and the government wants to stimulate the economy. By how much will aggregate demand at current prices shift initially (before multiplier effects) with

(a) A $50 billion increase in government purchases?
(b) A $50 billion tax cut?
(c) A $50 billion increase in income transfers?
What will the cumulative AD shift be for
(d) The increased G?
(e) The tax cut?
(f) The increased transfers?

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M955306

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