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Suppose that consumer spending initially rises by $5 billion for every 1 percent rise in household wealth and that investment spending initially rises by $20

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Suppose that consumer spending initially rises by $5 billion for every 1 percent rise in household wealth and that investment spending initially rises by $20 billion for every 1 percentage point fall in the real interest rate. Also assume that the economy's multiplier is 3 Instructions: Enter your answers as a whole number, a. If household wealth falls by 6 percent because of declining house values, and the real interest rate falls by 3 percentage points in what direction and by how much will the aggregate demand curve initially shift at each price level? Aggregate demand will initially shift rightward billion by s b. In what direction and by how much will teventually shift? Aggregate demand will eventually shot rightward by S billion

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