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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 signs in your answers. a. If government purchases increase by $3 billion in an economy with an MPW of 0.65 then the spending multiplier is AD curve finally shifts to the (Click to select) by $ billion. b. If government purchases decrease by $7 billion in an economy with an MPC of 0.20 then the spending multiplier is AD curve finally shifts to the (Click to select) by $ billion. and the [ and the billion. c. If a $5 billion tax rise occurs in an economy with an MPW of 0.60 then the spending multiplier is shifts to the (Click to select) by $ and the AD curve finally d. If a $2 billion tax cut causes an initial $0.3 billion increase in spending on domestic items then the spending multiplier is the AD curve finally shifts to the (Click to select) by $ billion. and

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 signs in your answers. a. If government purchases increase by $3 billion in an economy with an MPW of 0.65 then the spending multiplier is AD curve finally shifts to the (Click to select) by $ billion. b. If government purchases decrease by $7 billion in an economy with an MPC of 0.20 then the spending multiplier is AD curve finally shifts to the (Click to select) by $ billion. and the [ and the billion. c. If a $5 billion tax rise occurs in an economy with an MPW of 0.60 then the spending multiplier is shifts to the (Click to select) by $ and the AD curve finally d. If a $2 billion tax cut causes an initial $0.3 billion increase in spending on domestic items then the spending multiplier is the AD curve finally shifts to the (Click to select) by $ billion. and

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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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 signs in your answers. a. If government purchases increase by $3 billion in an economy with an MPW of 0.65 then the spending multiplier is AD curve finally shifts to the (Click to select) by $ billion. b. If government purchases decrease by $7 billion in an economy with an MPC of 0.20 then the spending multiplier is AD curve finally shifts to the (Click to select) by $ billion. and the [ and the billion. c. If a $5 billion tax rise occurs in an economy with an MPW of 0.60 then the spending multiplier is shifts to the (Click to select) by $ and the AD curve finally d. If a $2 billion tax cut causes an initial $0.3 billion increase in spending on domestic items then the spending multiplier is the AD curve finally shifts to the (Click to select) by $ billion. and
Transcribed Image Text: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 signs in your answers. a. If government purchases increase by $3 billion in an economy with an MPW of 0.65 then the spending multiplier is AD curve finally shifts to the (Click to select) by $ billion. b. If government purchases decrease by $7 billion in an economy with an MPC of 0.20 then the spending multiplier is AD curve finally shifts to the (Click to select) by $ billion. and the [ and the billion. c. If a $5 billion tax rise occurs in an economy with an MPW of 0.60 then the spending multiplier is shifts to the (Click to select) by $ and the AD curve finally d. If a $2 billion tax cut causes an initial $0.3 billion increase in spending on domestic items then the spending multiplier is the AD curve finally shifts to the (Click to select) by $ billion. and
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