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21 July, 23:54

Suppose the government in this economy decides to decrease government purchases by $250 billion. the decrease in government purchases will lead to a decrease in income, generating an initial change in consumption equal to-$62.5 billion. this decreases income yet again, causing a second change in consumption equal to. the total change in demand resulting from the initial change in government spending is

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  1. 22 July, 01:46
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    1 187.5 or 250x0.75

    2.140.6 or 187.5x0.75

    3. 1 trillion or 250x1/0.25
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