By how much will aggregate demand at current prices shift

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Reference no: EM13238370

Suppose the consumption function is C = $500 billion + 0.9Y and the government wants to stimulate the economy. By how much will aggregate demand at current prices shift initially (before multiplier effects) with:
A) $50 billion increase in government purchases?
b) $50 billion tax cut?
c) $50 billion increase in income transfers?

What will the cumulative AD shift be for
d) The increased G?

e) The tax cut?

f) The increased transfers?

Reference no: EM13238370

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