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Suppose the marginal propensity to consume in an economy is 0.75. By how much and in what direction does the AD shift if the total
Suppose the marginal propensity to consume in an economy is 0.75. By how much and in what direction does the AD shift if the total income in the economy suddenly decreases by $10 billion? (For simplicity, you may assume that the AS curve is completely elastic.) Correct Answer by $30 billion and to the left by $30 billion and to the right Incorrect Response by $40 billion and to the left by $40 billion and to the right
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