Question: Suppose the consumption function is C = $500 billion + 0.9Y and the government wants to stimulate the economy. By how much will aggregate demand
(a) A $50 billion increase in government purchases?
(b) A $50 billion tax cuts?
(c) A $50 billion increase in income transfer?
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a Computation of the Government purchases C 500 billion 09Y The equation explain 09 is the ... View full answer
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