1. Consider an economy in which its residents spend 90% of each additional dollar they earn and the government increases its spending by $400. Calculate the total effect on output (or aggregate demand)
2. The government reduces its spending by $4000 in an economy where households save 25% of each additional dollar they earn.
Calculate the total effect on output (or aggregate demand).
3. The government increases taxes by $6200 in an economy where households spend 92% of each additional dollar they earn.
Calculate the total effect on output (or aggregate demand).