MACRO ECON 6
MACRO ECON 6
6th Edition
ISBN: 9780357689820
Author: MCEACHERN
Publisher: CENGAGE L
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Chapter 11, Problem 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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