Question: How to solve this question? Do I have to use the Multiplier effect for this equation? 5. With the economy in a recession due to

How to solve this question? Do I have to use the Multiplier effect for this equation?

5. With the economy in a recession due to inadequate aggregate demand, the government increases its purchases by $1,200 . Suppose the central bank adjusts the money supply to hold the interest rate constant, investment spending remains unchanged, and the marginal propensity to consume is 4 2 . How large is the increase in aggregate demand? V HIDE

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