Question: Double check result please, ty Suppose that consumer spending initially rises by $5 billion for every 1 percent rise in household wealth and that investment
Double check result please, ty

Suppose that consumer spending initially rises by $5 billion for every 1 percent rise in household wealth and that investment spending initially rises by $20 billion for even1 1 percentage point fall in the real interest rate. Also assume that the economy's multiplier is 3. If household wealth falls by 6 percent because of declining house values, and the real interest rate falls by 3 percentage points, in what direction and by how much will the aggregate demand curve initially shift at each price level? The aggregate demand curve will shift by $ billion. In what direction and by how much will it eventually shift? The aggregate demand curve will shift by $ billion
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
