Calculate the total effect on output or aggregate demand

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1. Consider an economy in which its residents spend 90% of each additional dollar they earn and the government increases its spending by $400. Calculate the total effect on output (or aggregate demand)

2. The government reduces its spending by $4000 in an economy where households save 25% of each additional dollar they earn.

Calculate the total effect on output (or aggregate demand).

3. The government increases taxes by $6200 in an economy where households spend 92% of each additional dollar they earn.

Calculate the total effect on output (or aggregate demand).

Reference no: EM131172489

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