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4. Paco Lane is a small economy that has an average spending rate of 80 cents per 1 dollar of additional income and has a
4. Paco Lane is a small economy that has an average spending rate of 80 cents per 1 dollar of additional income and has a current level of output of 945 billion dollars. a. Find Paco Lane's spending multiplier b. If government reduces government spending by 30 billion dollars, what would be the new level of output? AE: C + 1 + G V AE': C + 1 + G' Aggregate Expenditures (AE) (Billions of THB) 30 45 ? 945 RGDP (Billions of THB)
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