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Suppose the economy suffers a negative AD shock and GDP drops from $20 trillion to $ 18 trillion. Assuming the marginal propensity to consumes 0.90,

Suppose the economy suffers a negative AD shock and GDP drops from $20 trillion to $ 18 trillion. Assuming the marginal propensity to consumes 0.90, if the Federal Government wants to stabilize the economy by increasing aggregate demand by $2 trillion, how big will the initial stimulus need to be?

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