ter 12 Homework Saved Help Save & Exit Suppose that consumer spending initially rises by $5 billion for every 1 percent rise in household wealth and that investment spending initially rises by $20 billion for every 1 percentage point fall in the real interest rate. Also assume that the economy's multiplier is 4. 11 Instructions: Enter your answers as whole numbers. a. If household wealth falls by 5 percent because of declining house values, and the real interest rate falls by 2 percentage points, in what direction and by how much will the aggregate demand curve initially shift at each price level? by Aggregate demand will shift billion Sook rint rences b. In what direction and by how much will it eventually shift? billion by Aggregate demand will shift Next> 11 of 16

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