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?

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M975191

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