Question
A) Government purchases increase by $10 billion and the economy has a marginal propensity to withdraw of 0.50. What is the magnitude and direction of
A) Government purchases increase by $10 billion and the economy has a marginal propensity to withdraw of 0.50. What is the magnitude and direction of the change in aggregate demand? (2 marks)
B) Government purchases decrease by $15 billion and the economy has a marginal propensity to consume of 0.30. What is the magnitude and direction of the change in aggregate demand? (3 marks)
C) The government of Canada decreases taxes by $45 billion and the economy has a marginal propensity to withdraw of 0.25. What is the magnitude and direction of the change in aggregate demand? (3 marks)
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Reimagining Capitalism In A World On Fire
Authors: Rebecca Henderson
1st Edition
1541730151, 9781541730151
