Question
I need an expert in macroeconomics who can help me with my homework. The economy of Scranton is currently in an economic situation depicted by
I need an expert in macroeconomics who can help me with my homework.
The economy of Scranton is currently in an economic situation depicted by point E0 on the graph to the right.
Suppose that the level of autonomous investment
investment expenditures increases
increases by$800 and the value of the simple multiplier is 2.5.Moreover, assume that there is no impact on the price level(the supply curve is horizontal in thisrange).
1.) Use thethree-point curve drawing tool to draw and label a new AD curve that shows the effect of this shock on the AD curve. Use the simple multiplier of 2.5 to calculate the exact location of the new AD curve.
2.) Use the point plotting tool to plot and label the new level of output along the AD curve.
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