Given the following information, where is output equal to aggregate demand given that autonomous spending is $3000,
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Question:
- Given the following information, where is output equal to aggregate demand given that autonomous spending is $3000, the marginal propensity to consume is .9, investment is $4000, government spending is $5000, and net exports are $1000. Now, suppose that government spending increases to $6000. Where is output equal to aggregate demand? What is the multiplier in this case?
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