Question: please answer quickly In a demand driven economy where AE = C + I + G, if government implements an expansionary fiscal policy of 't!,
please answer quickly

In a demand driven economy where AE = C + I + G, if government implements an expansionary fiscal policy of "'t!", the total change in equilibrium level of output can be calculated according to: Aye = AA/ (1 - z) . False, because the multiplier effect does not exist in such an economy. False, the above equation is only valid when the marginal propensity to spend out of national income is constant. O False, since when prices change along the way, the total change in equilibrium output will be less than the above. O True
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
