Question: Question one The diagram below shows an AD-AS model for a hypothetical economy. Suppose the economy is initially operating at point A. Then the government

Question one

The diagram below shows an AD-AS model for a hypothetical economy. Suppose the economy is initially operating at point A. Then the government increases its purchases of goods and services by 50, causing the AD curve to shift to the right as shown. (1) Calculate the 'simple multiplier'. (2) Calculate the 'multiplier'. 900 960 11E")I

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