Ask Question
1 November, 07:52

suppose that there are no crowding out effects and the mpc is. 9. by how much must the government increase expenditures to shift the aggregate demand curve right by $10 billion

+3
Answers (1)
  1. 1 November, 09:08
    0
    Answer: The answer is $ 1 billion.

    Explanation:

    MPC stands for the marginal propensity to consume.

    If MPC is 9 it implies that the multiplier is 10 i. e 1 / (1-0.9). The rise in aggregate demand is equal to multiplier times change in government expenditures so to boost aggregate demand by 10 billion dollar government has to increase expenditure by Dollar 1 billion.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “suppose that there are no crowding out effects and the mpc is. 9. by how much must the government increase expenditures to shift the ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers