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If taxes increase by 2400 in a nation that saves 15 of its

1. Consider a nation where inhabitants spend 90% of income and the government reduces its spending by $1200. The overall change in income (or AD) will be?

2. If taxes increase by $2400 in a nation that saves 15% of its income, the overall change in income (or AD) will be?

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Business Management: If taxes increase by 2400 in a nation that saves 15 of its

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Business Management: If taxes increase by 2400 in a nation that saves 15 of its

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