fiscal stimulas, Macroeconomics

Suppose the consumption function is C = $500 billion + 0.55Y and the government wants to stimulate the economy. By how much will aggregate demand at current prices shift initially (before multiplier effects) with

Instructions: Round your answers to 1 decimal place.

a) A $90 billion increase in government purchases?

$ billion

b) A $90 billion tax cut?

$ billion

c) A $90 billion increase in income transfers?

$ billion

What will the cumulative AD shift be for

d) The increased G?

$ billion

e) The tax cut?

$ billion

f) The increased transfers?

$ billion
Posted Date: 11/4/2012 12:02:06 PM | Location : United States

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