Assume that MPC = 4/5 when answering the following questions. a. If government expenditures rise by $2
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a. If government expenditures rise by $2 billion, by how much will the aggregate expenditure curve shift upward? By how much will equilibrium real GDP per year change?
b. If taxes increase by $2 billion, by how much will the aggregate expenditure curve shift downward? By how much will equilibrium real GDP per year change?
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a The aggregate expenditure curves shifts up by 2 billion equilibri...View the full answer
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