Favorites Tools Help d Sites Web Slice Gallery Question 4 (of 7) 5.00 points The 2008...

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business economics

Answer 1

Answer #1

1) Solution: 95 billion

Explanation: Initial increase in aggregate demand: $100 billion *0.95 = 95 billion

2) Solution: 1900 billion

Explanation: Multiplier = 1 / (1-MPC) = 1 / (1-0.95) = 20

Ultimate increase in aggregate demand: $95 billion * 20 = $1900 billion

Answer 2

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