In each case below a particular fiscal policy affects an economy's AD curve via the spending multiplier. Calculate the spending multiplier and find the direction and size of the shift in the AD curve. Enter your responses for the spending multiplier rounded to 2 decimal places, and size of the shift of the AD curve rounded to 1 decimal place. Do not put minus sign in your answer. a. If government purchases increase by $2 billion in an economy with an MPW of 0.55 then the spending multiplier is shifts to the (Click to select) by S billion. b. If government purchases decrease by $6 billion in an economy with an MPC of 0.40 then the spending multiplier is shifts to the (Click to select) by S billion. c. If a $4 billion tax rise occurs in an economy with an MPW of 0.70 then the spending multiplier is (Click to select) by $ billion. and the AD curve finally d. If a $5 billion tax cut causes an initial $1.6 billion increase in spending on domestic items then the spending multiplier is finally shifts to the (Click to select) by $ billion. and the AD curve finally and the AD curve finally shifts to the and the AD curve

In each case below a particular fiscal policy affects an economy's AD curve via the spending multiplier. Calculate the spending multiplier and find the direction and size of the shift in the AD curve. Enter your responses for the spending multiplier rounded to 2 decimal places, and size of the shift of the AD curve rounded to 1 decimal place. Do not put minus sign in your answer. a. If government purchases increase by $2 billion in an economy with an MPW of 0.55 then the spending multiplier is shifts to the (Click to select) by S billion. b. If government purchases decrease by $6 billion in an economy with an MPC of 0.40 then the spending multiplier is shifts to the (Click to select) by S billion. c. If a $4 billion tax rise occurs in an economy with an MPW of 0.70 then the spending multiplier is (Click to select) by $ billion. and the AD curve finally d. If a $5 billion tax cut causes an initial $1.6 billion increase in spending on domestic items then the spending multiplier is finally shifts to the (Click to select) by $ billion. and the AD curve finally and the AD curve finally shifts to the and the AD curve

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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