ECON MACRO (with ECON MACRO Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
ECON MACRO (with ECON MACRO Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
5th Edition
ISBN: 9781305659094
Author: William A. McEachern
Publisher: Cengage Learning
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Chapter 11, Problem 1.6P
To determine

the effect on the size of the spending multiplier, when the investment has an autonomous component and a component that varies directly with the level of real GDP.

Concept Introduction:

Government purchases: Government purchases are the tools of fiscal policy by which government increase or decrease the aggregate demand of the economy and control the macroeconomic indicators like inflation, unemployment, GDP growth rate.

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