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I need help on questions 1-6, plus the graph. I'm not sure what to do. What was the maximum change in GDP from government spending?
I need help on questions 1-6, plus the graph. I'm not sure what to do.
- What was the maximum change in GDP from government spending?
- What was the maximum change in GDP from the tax cut?
- What was the maximum change in GDP from government transfers?
- If these numbers were accurate, what was the maximum change in GDP from the entire stimulus package?
- Assume instead that American consumers, fearing an economic collapse, increased their marginal propensity to save to 0.5. Would this increase, decrease, or not change the effectiveness of the stimulus package? Explain.
- Assume the marginal propensity to save was 0.5 instead of 0.75. Calculate the maximum change in GDP from the entire stimulus package?
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