Ultimate effect of that increase in investment spending

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Reference no: EM131389681

Assume an economy with no government or foreign trade and the following equations, Based on this data C=150 + .9DI, I=250

a) Show what would happen in the first five rounds following an increase in investment spending from 400 to 800.0

b) What would be the ultimate effect of that increase in investment spending?

c) How much would households spend on consumption goods in the new equilibrium?

Reference no: EM131389681

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