18. If MPC = 0.65, find the government spending multiplier. If government spending increases by 100, what will be the change in Y? Will Y increase or decrease? What be the new Y (Y2) if you are given that Y1 is 500?

18. If MPC = 0.65, find the government spending multiplier. If government spending increases by 100, what will be the change in Y? Will Y increase or decrease? What be the new Y (Y2) if you are given that Y1 is 500?

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter9: Aggregate Demand

Section: Chapter Questions

Problem 5.10P

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18. If MPC = 0.65, find the government spending multiplier. If government spending
increases by 100, what will be the change in Y? Will Y increase or decrease? What will
be the new Y (Y2) if you are given that Y1 is 500?

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