In an economy with a fixed price level, autonomous spending is $20 trillion and the slope of

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In an economy with a fixed price level, autonomous spending is $20 trillion and the slope of the AE curve is 0.6.

a. What is the equation of the AE curve?

b. Calculate equilibrium expenditure. What is the value of induced expenditure at equilibrium expenditure?

c. Calculate the multiplier.

d. Calculate equilibrium expenditure if investment increases by $1 trillion.

e. Calculate the shift of the aggregate demand curve if investment increases by $1 trillion.

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Economics

ISBN: 9781292433639

14th Global Edition

Authors: Michael Parkin

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Question Posted: Jan 27, 2024 10:05 PM

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In an economy with a fixed price level, autonomous spending is $20 trillion and the slope of

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