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The US. economy slowed signicantly in early EDGE. and policy,F maker's were extremely concerned about growth. To boost the economy, Congress passed several relief packages

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The US. economy slowed signicantly in early EDGE. and policy,F maker's were extremely concerned about growth. To boost the economy, Congress passed several relief packages [the Economic Stimulus Act of 2003 and the Pnnerican Recovery and Reimrestment Act of EM?) that combined would deliver about Hm billion in govern ment spending. Assume, for the sake of argument, that this spending was in the form of payments made directly to consumers. The objecu'ee was to boost the economy by increasing the disposable income of American consumers. a. Calculate the initial change in aggregate consumer spending as a consequence of this policy measure if the marginal propensity to consume (MPH) in the United States is t}. 5. Then calculate the resulting change in real GDP arising from the WW billion in payments

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