7The graph below depicts an economy where an increase in aggregate demand has caused inflation. Assume the government decidesto conduct fiscal policy by changing taxes to bring inflation under control.Fiscal Policy160LRAS150AS14013012011010090AD,807060AD504080 160 240 320 400 480 560 640 720 800Real GDP (billions of dollars)7 of 14Next >McGrawHill< PrevMatch DiacriticsWhole WordsHighlight All Match CaseTyne here to searchPrice Level 60AD504080 160 240 320 400 480 560 640 720 800Real GDP (billions of dollars)Instructions: Enter your answer as a whole number. If you are entering a negative number include a minus sign.a. How much does aggregate demand need to change to restore the economy to its long-run equilibrium?$4billionb. If the MPC is 0.5, how much do taxes need to change to shift aggregate demand by the amount you found in part a?$4billionSuppose instead that the MPC is 0.75.c. How much does aggregate demand and taxes need to change to restore the economy to its long-run equilibrium?Aggregate demand needs to change by $billion and taxes need to change by $billion.

a. How much does aggregate demand need to change to restore the economy to its long-run equilibrium? $4 billion b. If the MPC is 0.5, how much do taxes need to change to shift aggregate demand by the amount you found in p %24 billion Suppose instead that the MPC is 0.75. c. How much does aggregate demand and taxes need to change to restore the economy to its long-run equilibriu Aggregate demand needs to change by $ billion and taxes need to change by $ billion.

a. How much does aggregate demand need to change to restore the economy to its long-run equilibrium? $4 billion b. If the MPC is 0.5, how much do taxes need to change to shift aggregate demand by the amount you found in p %24 billion Suppose instead that the MPC is 0.75. c. How much does aggregate demand and taxes need to change to restore the economy to its long-run equilibriu Aggregate demand needs to change by $ billion and taxes need to change by $ billion.

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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