ECNS 202 PRINTOUT
ECNS 202 PRINTOUT
8th Edition
ISBN: 9781337096584
Author: Mankiw
Publisher: CENGAGE L
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Chapter 21, Problem 3QR
To determine

Multiplier and crowding out effect on aggregate demand.

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If the government increases expenditures on goods and services and increases taxation by the same amount, which of the following will occur? A. Aggregate demand will be unchanged. B. Aggregate demand will increase. C. Interest rates will decrease. D. The money supply will decrease.
What happens to the Aggregate Demand (AD) when there is an increase in Government purchases.
How does increased government spending affect the aggregate demand curve?
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