Many students are impressed by the Keynesian multiplier effect of government spending when they first learn macroeconomics. As they learn more, however, they realize that the multiplier effect cannot be so large. Using an IS-LM and AD- AS framework, explain the (at least two) factors that reduce the effect of government spending

Many students are impressed by the Keynesian multiplier effect of government spending when they first learn macroeconomics. As they learn more, however, they realize that the multiplier effect cannot be so large. Using an IS-LM and AD- AS framework, explain the (at least two) factors that reduce the effect of government spending

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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please show all steps to getting the answer! Thanks