Suppose that the government decreases spending by 100
Suppose that the government decreases spending by $100 billion.What happens to aggregate demand? What is the likely effect on prices and output? Where are the new equilibrium price level and GDP relative to the old levels?
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An economy is inlong-run macroeconomic equilibrium when each of the followingaggregate demand shocks occurs. What kind of gap-inflationaryor recessionary-will the economy face after the shock
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Suppose that the government decreases spending by $100 billion.What happens to aggregate demand What is the likely effect onprices and output Where are the new equilibrium price level andGDP relative to the old levels
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Suppose the government decreases spending by $20 billion. How much will this change equilibrium GDP if the MPC is 80 percent and the tax rate is 1/6 (16.6 percent)
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