Question
e) Examine the graph above. Suppose that government increases its spending, shifting the aggregate expenditure line upwards. GDP increases from GDP, to GDP, and
e) Examine the graph above. Suppose that government increases its spending, shifting the aggregate expenditure line upwards. GDP increases from GDP, to GDP, and this amount is $550 billion. If the MPC is 0.8, calculate the difference between the points N and L to find out by how much the government spending changed. AE (trillions of dollars) 45 GDP, GDP, Y = AE AE, AE Real GDP, Y (trillions of dollars)
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Macroeconomics
Authors: N. Gregory Mankiw, William M. Scarth
5th Canadian Edition
1464168504, 978-1464168505
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