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0.3 0.7 1.43 6. The multiplier effect of a change in government purchases 3.3333 0.3 0.7 Consider a hypothetical closed economy in which households spend $0.70 of each additional dollar they earn and save the remaining $0.30. 1 1.43 The marginal propensity to consume (MPC) for this economy is and the spending multiplier for this economy is 3.3333 Suppose the government in this economy decides to increase government purchases by $300 billion. The increase in government purchases will lead to an increase in income, generating an initial change in consumption equal to v. This increases income yet again, $90 billion causing a second change in consumption equal to The total change in demand resulting from the initial change in $105 billion government spending is $500 billion The following graph shows the aggregate demand curve (AD1) for this economy before the change in government spending. $1,000 billion $210 billion Use the green line (triangle symbol) to plot the new aggregate demand curve (AD2) after the multiplier effect takes place. For simplicity, assume that there is no "crowding out." Hint: Be sure that the new aggregate demand curve (AD2) is parallel to the initial aggregate demand curve (AD,). You can see the slope of AD, by selecting it on the graph. $105 billion $0.6 trillion $147 billion $0.7 trillion $90 billion $1,000 billion $1 trillion $500 billion $2.1 trillion

0.3 0.7 1.43 6. The multiplier effect of a change in government purchases 3.3333 0.3 0.7 Consider a hypothetical closed economy in which households spend $0.70 of each additional dollar they earn and save the remaining $0.30. 1 1.43 The marginal propensity to consume (MPC) for this economy is and the spending multiplier for this economy is 3.3333 Suppose the government in this economy decides to increase government purchases by $300 billion. The increase in government purchases will lead to an increase in income, generating an initial change in consumption equal to v. This increases income yet again, $90 billion causing a second change in consumption equal to The total change in demand resulting from the initial change in $105 billion government spending is $500 billion The following graph shows the aggregate demand curve (AD1) for this economy before the change in government spending. $1,000 billion $210 billion Use the green line (triangle symbol) to plot the new aggregate demand curve (AD2) after the multiplier effect takes place. For simplicity, assume that there is no "crowding out." Hint: Be sure that the new aggregate demand curve (AD2) is parallel to the initial aggregate demand curve (AD,). You can see the slope of AD, by selecting it on the graph. $105 billion $0.6 trillion $147 billion $0.7 trillion $90 billion $1,000 billion $1 trillion $500 billion $2.1 trillion

MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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PLEASE ANSWER ALL QUESTIONS NOT JUST SOME

PLEASE WRITE THE EXACT NUMBERS FOR THE GRAPH. don't just draw a line. explain it in layman's terms

PLEASE READ CAREFULLY, THIS MAY BE A SIMILAR QUESTION, BUT ALL QUESTIONS ARE DIFFERENT

 

140 AD, 135 AD2 130 125 120 115 110 105 100 1 3 7 OUTPUT (Trillions of dollars) PRICE LEVEL
Transcribed Image Text:140 AD, 135 AD2 130 125 120 115 110 105 100 1 3 7 OUTPUT (Trillions of dollars) PRICE LEVEL
0.3 0.7 1 1.43 6. The multiplier effect of a change in government purchases 3.3333 0.3 0.7 Consider a hypothetical closed economy in which households spend $0.70 of each additional dollar they earn and save the remaining $0.30. 1 1.43 The marginal propensity to consume (MPC) for this economy is and the spending multiplier for this economy is 3.3333 Suppose the government in this economy decides to increase government purchases by $300 billion. The increase in government purchases will lead to an increase in income, generating an initial change in consumption equal to This increases income yet again, $90 billion causing a second change in consumption equal to . The total change in demand resulting from the initial change in $105 billion government spending is $500 billion The following graph shows the aggregate demand curve (AD1) for this economy before the change in government spending. $1,000 billion $210 billion Use the green line (triangle symbol) to plot the new aggregate demand curve (AD2) after the multiplier effect takes place. For simplicity, assume that there is no "crowding out." Hint: Be sure that the new aggregate demand curve (AD2) is parallel to the initial aggregate demand curve (AD,). You can see the slope of AD, by selecting it on the graph. $105 billion $0.6 trillion $147 billion $0.7 trillion $90 billion $1,000 billion $1 trillion $500 billion $2.1 trillion
Transcribed Image Text:0.3 0.7 1 1.43 6. The multiplier effect of a change in government purchases 3.3333 0.3 0.7 Consider a hypothetical closed economy in which households spend $0.70 of each additional dollar they earn and save the remaining $0.30. 1 1.43 The marginal propensity to consume (MPC) for this economy is and the spending multiplier for this economy is 3.3333 Suppose the government in this economy decides to increase government purchases by $300 billion. The increase in government purchases will lead to an increase in income, generating an initial change in consumption equal to This increases income yet again, $90 billion causing a second change in consumption equal to . The total change in demand resulting from the initial change in $105 billion government spending is $500 billion The following graph shows the aggregate demand curve (AD1) for this economy before the change in government spending. $1,000 billion $210 billion Use the green line (triangle symbol) to plot the new aggregate demand curve (AD2) after the multiplier effect takes place. For simplicity, assume that there is no "crowding out." Hint: Be sure that the new aggregate demand curve (AD2) is parallel to the initial aggregate demand curve (AD,). You can see the slope of AD, by selecting it on the graph. $105 billion $0.6 trillion $147 billion $0.7 trillion $90 billion $1,000 billion $1 trillion $500 billion $2.1 trillion
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